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TORN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Mr. Paul Loomis
Mayor
Mr. Werner S. Wolff
Vice Mayor
Councilmembers
Ms. Paula Abbott Mr. Richard Johnson
Mr. Barton Rochman
Chuck Sweet
Town Manager
David L. Andrews
Finance Director
Prepared by:
Finance Department
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal. 1
List of Principal Officials 7
Organizational Chart 8
GFOA Certificate of Achievement 9
FINANCIAL SECTION
Independent Auditor's Report 13
Management's Discussion and Analysis 15
Basic Financial Statements
Statement of Net Assets 26
Statement of Activities 27
Balance Sheet- Governmental Funds 28
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets 29
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds 30
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances of Governmental Funds to the Statement of Activities 31
General Fund Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual 32
HURF Fund Statement of Revenues, Expenditures, and Changes
in Fund Balances - Budget and Actual 33
Public Transportation Fund Statement of Revenues, Expenditures, and Changes
in Fund Balances - Budget and Actual 34
Statement of Net Assets - Proprietary Funds 35
Statement of Activities - Proprietary Funds 36
Statement of Cash Flows - Proprietary Funds 37
Notes to the Financial Statements 39
Required Supplementary Information:
Public Safety Personnel Retirement System and Arizona
Corrections Officer Retirement Plan
Schedule of Funding Progress 60
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
TABLE OF CONTENTS
STATISTICAL SECTION
Government-wide information:
Government-wide Expenses by Function 72
Government-wide Revenues 73
Fund Information:
General Government Expenditures by Function 74
General Government Revenues by Source 75
State of Arizona Sales Tax Information Taxable Activities,
Tax Rates and Distribution Shares 76
Transaction Privilege (Sales) Tax Rates by Category 77
Historical and Projected Excise Tax Collections 78
Town Transaction Privilege (Sales) and Franchise Tax Collections
By Industry Classification 79
Special Assessment Billings and Collections 80
Estimated Debt Service Coverage Regarding Excise Tax Collections 81
Statement of Bonded Indebtedness 82
Direct and Overlapping General Obligation Bonded Debt 83
Computation of Legal Debt Margin 84
Property Tax Assessment Ratios and Comparative Secondary
Assessed Valuation Histories 85
Comparative Secondary Assessed Valuation Histories 86
Assessed Valuations and Tax Rates 87
Primary and Secondary Property Tax Rates
Direct and Overlapping Governments 88
Net Assessed and Full Cash Values of Taxable Property 89
Secondary Assessed Valuation By Property Classification 90
Secondary Assessed Valuation of Major Taxpayers 91
Historical and Projected Water System Revenues, Expenses,
Debt Service and Coverage 92
Oro Valley Water Utility Schedule of Rates, Fees and Charges 93
Number of Meters Connected 96
Number of Connections by Type 97
History of Connections to the Water System 98
History of Building Permits 99
Schedule of the 15 Largest Water System Customers 100
Demographic Statistics 101
Property Value, Construction and Bank Deposits 103
Schedule of Top Employers 104
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
TABLE OF CONTENTS
Combining and Individual Fund
Statements and Schedules
Combining Balance Sheet-Nonmajor Governmental Funds 64
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances -Nonmajor Governmental Funds 65
Townwide Roadway Development Impact Fees Fund- Schedule of
Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual 66
State Seizures and Forfeitures Fund - Schedule of Revenues, Expenditures, and
Changes in Fund Balances -Budget and Actual 67
Federal Seizures and Forfeitures Fund - Schedule of Revenues, Expenditures, and
Changes in Fund Balances - Budget and Actual 68
Municipal Debt Service Fund- Schedule of Revenues, Expenditures, and
Changes in Fund Balances- Budget and Actual 69
INTRODUCTORY SECTION
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I
O� �
� - TOWN OF ORO VALLEY
11000 N. LA CANADA DRIVE
i� ORO VALLEY,ARIZONA 85737
111 110.
A Pk. Administrative Offices(520)229-4700 Fax(520)297-0428
,, www.townoforovalley.com
pOv 1fai
LADED
October 17, 2003
To the Honorable Mayor r Loomis, Members of the Town Council, and Citizens of the Town of
Oro Valley:
State law requires that all general-purpose local governments, publish within six months of the
close of each fiscal year a compete set of financial statements presented in conformity with U.S.
generally accepted accounting principles (GAAP) and audited in accordance with generally
accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that
requirement, we hereby issue the Comprehensive Annual Financial Report of the Town of Oro
Valley for the fiscal year ended June 30, 2003.
This report consists of management's representations concerning the finances of the Town of Oro
Valley. Consequently, management assumes full responsibility for the completeness and
reliability of all of the information presented in this report. To provide a reasonable basis for
making these representations, management of the Town of Oro Valley has established a
comprehensive internal control framework that is designed both to protect the Town's assets from
loss, theft, or misuse and to compile sufficient reliable information for the preparation of the
Town of Oro Valley's financial statements in conformity with GAAP. Because the cost of
internal controls should not outweigh their benefits, the Town of Oro Valley's comprehensive
framework of internal controls has been designed to provide reasonable rather than absolute
assurance that the financ^__Li statements will be free from material misstatement. As management,
we assert that, to the best of our knowledge and belief, this financial report is complete and
reliable in all material respects.
The Town of Oro Valley's financial statements have been audited by Cronstrom and Trbovich P.
C., a firm of licensed certified public accountants. The goal of the independent audit was to
provide reasonable assurance that the financial statements of the Town of Oro Valley for the
fiscal year ended June 30, 2003, are free of material misstatement. The independent audit
involved examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; assessing the accounting principles used and significant estimates made by
management; and evaluating the overall financial statement presentation. The independent
auditor concluded, based upon the audit, that there was a reasonable basis for rendering an
unqualified opinion that the Town of Oro Valley's financial statements for the fiscal year ended
June 30, 2003, are fairly presented in conformity with GAAP. The independent auditor's report
is presented as the first component of the financial section of this report.
1
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management's Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in
conjunction with it. The Town of Oro Valley's MD&A can be found immediately following the
report of the independent auditors.
Profile of the Government
The Town of Oro Valley was incorporated in 1974. It is located in northeastern Pima County
and has a land area of 32.91 square miles. The Town's current population is 37,260.
The Town of Oro Valley operates under the Council-Manager form of government.
Policymaking and legislative authority is vested in the Town Council, which consists of a Mayor
and four Council Members. Council Members are elected to four-year staggered terms. The
citizens of Oro Valley elect the Mayor. The Council, from among its members, selects the Vice-
Mayor. The Town Council is responsible, among other things, for the adoption of local
ordinances, budget adoption, the development of citizen advisory committees and the hiring of
the Town Manager. The Manager is responsible for implementation of the policies of the Town
Council. The Town Manager appoints all department heads except the Town Clerk, Chief of
Police, Town Engineer and Magistrate.
The Town of Oro Valley provides a full range of services including police protection; the
construction and maintenance of streets and related infrastructure; the provision of water
services; public transportation services; recreational activities, a public library and cultural
events. In addition to general government activities, the governing body is financially
accountable for the Municipal Property Corporation; therefore, this activity is included in the
reporting entity. Additional information in regards to the Municipal Property Corporation can be
found in Note 1 A in the notes to the financial statements.
The annual budget serves as the foundation for the Town of Oro Valley's financial planning and
control. All departments of the Town are required to submit requests for appropriation to the
Town Manager in March of each year. The Town Manager uses these requests as the starting
point for developing a proposed budget. The Town Manager then presents this proposed budget
to the Council for review each year. The Council is required to hold public hearings on the
proposed budget and to adopt a tentative budget by no later than the third Monday in July of each
year. The appropriated budget is prepared by fund and department. The Town Manager, subject
to Town Council approval, may at any time transfer various unencumbered appropriation
balances or portions thereof between a department or activity. The adopted budget cannot be
amended in any way without Town Council approval.
The Town•of Oro Valley maintains extensive budgetary controls. The objective of these
controls is to ensure compliance with legal provisions embodied in the annual appropriated
budget approved by the Town Council.
2
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is
considered from the broader perspective of the specific environment within which the Town of
Oro Valley operates.
Local economy
The local economic condition for the Town of Oro Valley remained stable in fiscal year 2002/03.
.
As in past years, the Town relies heavily on local sales tax revenue collections from various
industries such as construction, retail trade and hotel/motel .lodging primary Thefinancial
challenge that the General Fund continues to face has been to keep up with increasing service
demands, in light of decreasing residential construction activity and related construction sales tax
revenues.
The issuance of single family residential building permits has decreased from a high of 1'144 in
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FY 1999/00 to about 400-500 over the past three years. Construction sales tax collections have
decreased over the same period from about $3.0 million to approximately $2.1 million in FY
2003/04. The Town has implemented several measures to stabilize the General Fund's cash
reserves and replace and supplement this revenue source.
The Town continues to expand its annexation and economic development efforts. To this end, in
the summer of 2003 the Town annexed an area south of the Town limits known as "Area B"
which includes 90-100 businesses. This resulted in an increase of approximately $800,000 in
y
local sales tax collections and $700,000 in state shared revenues. Potential future annexation
areas include approximately 9.75 square miles to the south and west of the existing Town limits.
This area includes two resort hotels, one outlet mall and various retail and service businesses.
In addition to its business retention program, the Town is working diligently dill entl towards the
development of several significant economic development projects. A five-star resort is expected
to open in the next three to five years and is projected to generate approximately $1.3 million in
direct sales taxes annually. Additionally as much as 1.5 million square feet of retail shopping
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may be constructed within the next three to four years along with a 225 room full service hotel
and additional restaurants.
Long-term financial planning
On December 4, 2002, the Town Council directed the Town's Budget and_Bond Committee ttee to
develop a Town Revenue Plan. The scope of this assignment is to focus onotential additional
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General Fund revenue sources as a supplement to the Town's existing tax base. Several meetingswere held throughout this fiscal year in developing a recommendation to the Town Council. A
recommendation to amend the Town's sales tax code may be made to the Town Council in early
2004. In addition, the committee has made financial projections on the Town's major operating
J p g
funds such as the General Fund, Highway Fund, Public Transportation Fund and Townwide
Roadway Development Impact Fee Fund from the present through fiscal year 2009/2010 to
justify
analyze and justify their recommendations.
3
Cash management polices and practices The Town uses a system of consolidated cash
management. Cash from all funds is pooled in a central disbursement fund. Cash to be used for
payment of current expenditures is maintained in a checking account; the balance of cash is
maintained on deposit with the Arizona State Treasurer's Local Government Investment Pool.
Cash in the Local Government Investment Pool (LG[P) is available upon 24 hours notice. The
LGIP invests in U.S. Treasury Notes, U.S. Treasury Bills and federally guaranteed insurance
contracts. The average interest rate for the fiscal year 2001/02 was 2.798% and 1.838% in fiscal
year 2002/03. Investments held at LGIP earned $524,297 in interest revenue for the year ended
June 30, 2003. During this fiscal year the Town incurred a loss on investments on deposit with
the LGIP in the amount of$919,774.
A debt service reserve fund was established in 1996 for the Municipal Property Corporation
(MPC) municipal water system acquisition bonds. In 1999, MPC revenue bonds were issued for
the construction of the community development building and for water system improvements and
a reserve fund was also established. In addition, a debt service reserve fund was established for
the bonds issued in 2000 for the excise tax revenue obligations and water development fee
revenue obligations. These reserve funds are maintained in trust accounts with Wells Fargo
Bank. Funds on deposit in the trust accounts are invested solely in obligations that are issued or
guaranteed by the U.S. Treasury, such as U.S. Treasury bills, bonds and notes ("U.S. Treasury
Securities"). Interest on investments held with the trustee earned $99,397 for fiscal year
2002/2003.
Risk management The Town of Oro Valley participates in the Arizona Municipal Risk
Retention Pool. Risk coverage includes general liability, errors and omissions, property and
automobile insurance. The policy insures up to $2,000,000 per incident occurrence plus any
excess liability of up to a $10,000,000 limit per occurrence per year. Coverage is provided on a
claims made basis.
The Town participates in the Arizona Municipal Workers Compensation Pool for workers
compensation insurance coverage.
The Town of Oro Valley is self-insured for unemployment compensation. Unemployment
reserves totaled $228,593 as of June 30, 2003 for the Town's 289 full-time, 17 part-time and 31
seasonal employees. The Town did not make an unemployment contribution in fiscal year
2002/2003.
Pension benefits
The Town of Oro Valley contributes to the Public Safety Personnel Retirement System (PSPRS),
agent multiple-employer, public employee retirement system that acts as a common investment
and administrative agent to provide retirement and death and disability benefits for all eligible
commissioned police department personnel. All benefit provisions and other requirements are
established by the state statutes. Employees were required to contribute 7.65 percent of their
annual salary to PSPRS in FY 2002/03. The Town is required to contribute the remaining
amounts necessary to fund the PSPRS, as determined by the actuarial basis specified by statute.
The rate for FY 2002/03 was 10.56 percent of the annual covered payroll for PSPRS
4
On October 1, 2002, the Town Council approved the transfer of all 401 (a) assets held bypolice
dispatchers to the Arizona Correction Officers Retirement Plan (ACORP). The Correction
Officers Retirement Plan is an agent multiple-employer which is administered in the same
manner as the Public Safety Personnel Retirement System. Employees were required to
contribute 8.50 percent while the Town contributed 7.54 percent of their annual salary in FY
2002/03.
All non-police and certain part-time employees of the Town participate in a defined contribution
pension plan 401 (a) administered by the ICMA Retirement Corporation. All eligible employees
must participate in the plan six months from the date they are hired. Contributions made by an
employee vest immediately and contributions made by the Town vest after one year of service.
An employee that leaves the employment of the Town is entitled to his/her contributions and the
vested portion of the Town's contributions, plus interest earned. Each employee must contribute
5 percent of gross earnings. The Town must contribute 7 percent of gross earnings.
Effective September 1, 2003, the Town will no longer be contributing to the defined contribution
pension plan 401 (a). The Town has elected to participate in the Arizona State Retirement
System which will affect all employees currently participating in the 401 (a) pension plan.
Additional information on the Town of Oro Valley's pension arrangements can be found in Note
4D pages 55 - 57.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement
for Excellence in Financial Reporting to the Town for its Comprehensive Annual Financial
Report for the year ended June 30, 2002. In order to be awarded a Certificate of Achievement,
the Town published an easily readable and efficiently organized comprehensive annual financial
report. The report satisfied both U.S. generally accepted accounting principals and applicable
legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement
Program's requirements and we are submitting it to the GFOA to determine its eligibility for
another certificate.
5
We would also like to extend our appreciation to the Mayor and Council for their leadership and
support. The preparation of this Comprehensive Annual Financial Report was made possible by
the dedicated work of the Finance Department staff. A special acknowledgement goes to Mary
Rallis, Accounting Supervisor for her efforts in converting the Comprehensive Annual Financial
Report to the GASB 34 requirements. Thank you, Mary! Additionally, each member of the
department has our sincere appreciation for the contributions made in the preparation of this
report.
Respectfully submitted,
VP
Chuck Sweet
Town Manager
David L. Andrews
Finance Director
d
TOWN OF ORO VALLEY, ARIZONA
LIST OF PRINCIPAL OFFICIALS
ELECTED OFFICIALS
Mayor Mr. Paul Loomis
Vice-Mayor Mr. Werner S. Wolff
Council Member Ms. Paula Abbott
Council Member Mr. Richard Johnson
Council Member Mr. Barton Rochman
DEPARTMENT HEADS
Town Manager Chuck Sweet
Finance Director David L. Andrews
Town Clerk Kathryn E. Cuvelier
Magistrate George Dunscomb
Water Utility Director Alan Forrest
Human Resources Director Jeff Grant
Town Engineer Bill Jansen
Town Attorney Mark Langlitz
Chief of Police Daniel G. Sharp
Community Development Director H. Brent Sinclair
7
TOWN OF ORO VALLEY, ARIZONA
ORGANIZATIONAL CHART
Town Council
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5. Ai•Pia.r .:1 tft A¢.Yt:2:. n'+W..w.fr..'..`s.... - . •' ,• a. Yd �....r,. ., . - i1 9 �1 .,e f.i��wr:;
- r Mn-..- a ;4 1� C,r4!1'71..Ykk yy^�. lx`,•., $.f..
I, Boards & Chuck Sweet t George Dunscomb
Commissions Town Manager Town Magistrate
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Jeff Weir
Economic H. Brent Sinclair
Development Community
p # Development Director
.* Administrator
Ainsley Reeder
•
Parks & Recreation
i Administrator
Terry Vosler
Building Administrator
..,..2.,,,..±w:,,,... .... .1t.. . R*i..t ;...yc.:k' c:,..,.a-.a ..r, .;,,.y.4'.i A t,,ik,i.,..;`_:t,,,,,,',,
Kathi Cuvelier Daniel Sharp 1 `t
Town Clerk Police Chief
f, Bryant Nodine
7 Planning &Zoning
Administrator
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i1 ,. • i.-•. 4.4,,,,.°: f'°*tYi,:..�>`tix�,'t»:^•s',.i,.
Mark Langlitz Alan
, a Forrest
`° Town Attorney :r�,a°z,-.,4�... .4t �.. :*;"%;,; :; �'.
Water Utility Director
Mary Hartz-Musgrave
.r Managing Librarian
Jeff Grant Bill Jansen
Human Resources
Town Engineer
Director
I
David Andrews John Zukas
Finance Director Transit Services
Administrator
4.
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t:1 Kevin Verville
Information
Technology
Administrator 8
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Town of Oro Valley,
Arizona
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2002
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports(CAFRs)achieve the highest
standards in government accounting
and financial reporting.
�oce oFf,� 4 !„�G�� p��
CORPORATiON tkLuan..:),
President
/POD 0
anaot
*Air 4e.%
Executive Director
9
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1
10
FINANCIAL SECTION
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12
CI CRONSTROM
EI I &ATRBOVICH
CCOUNTANT S
INDEPENDENT AUDITOR'S REPORT
The Honorable Mayor and the Town Council of the
Town of Oro Valley, Arizona
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the
Town of Oro Valley, Arizona (Town), as of and for the year ended June 30, 2003, as listed in the
table of contents. These financial statements are the responsibility of the Town's management.
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial s tatements. A n audit also i ncludes a ssessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the Town of Oro Valley, Arizona,
as of June 30, 2003, and the respective changes in financial position and cash flows, where
applicable, thereof and the respective budgetary comparison for the General Fund, HURF Fund
and Public Transportation Fund for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
A prior period adjustment was recorded and is presented in Note 3 A. in the notes to the basic
financial statements to correct an error in the previously issued financial financial statements.
The management's discussion and analysis on pages 15 - 24 and the Public Safety Personnel
Retirement System Schedule of Funding Progress on page 60 are not a required part of the basic
financial statements but are supplementary information required by the Governmental
Accounting Standards Board. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation
of the required supplementary information. However, we did not audit the information and
express no opinion on it.
13
8706 EAST MANZANffA DRIVE,SURE 100 • SCOTTSDALE, ARIZONA 85258 • (480) 348-1102 • FAX (480) 348-1104
A PROFESSIONAL CORPORATION
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the Town's basic financial statements. The introductory section, combining
and individual fund financial statements and schedules and statistical section are presented for
purposes of additional analysis and are not a required part of the basic financial statements. The
combining and individual fund financial statements and schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial statements taken as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we express no opinion on
them.
As described in Note 3, the Town has implemented a new financial reporting model, as required
by the provisions of GASB statement No. 34, Basic Financial Statements - and Management's
Discussion and Analysis-for State and Local Governments, as of June 30, 2003.
ektvv ,
:G-.
Cronstrom & Trbovich, P.C.
October 17, 2003
14
Management's Discussion and Analysis
As management of the Town of Oro Valley (Town), we offer readers of the Town's financial
statements this narrative overview and analysis of the financial activities of the Town for the
fiscal year ended June 30, 2003. We encourage readers to consider the information presented
here in conjunction with additional information that we have furnished in our letter of
transmittal.
Financial Highlights
• The assets of the Town of Oro Valley for FY 2002/03 exceeded liabilities by
$54,903,752 (net assets). Of this amount, $24,091,245 (unrestricted net assets)
may be used to meet the government's ongoing obligations to citizens and
creditors.
• The government's total net assets increased by$4,981,524.
• As of June 30, 2003, the Town of Oro Valley's governmental funds reported
combined ending fund balances of$16,161,262 which is a decrease of$4,560,299
or 22.0% in comparison to last fiscal year.
• At the end of the current fiscal year, unreserved fund balance for the General Fund
was $8,087,246 or 46.3% of total General Fund expenditures. The unreserved
fund balance included $319,987 designated for long-term compensated absences
and $195,312 designated for unemployment. The remaining $7,571,947 was
undesignated.
• Total debt for the Town of Oro Valley at June 30, 2003 was $55,017,960.
Compared to last fiscal year this was a net decrease of$848,105 or 1.5%.
Overview of the Financial Statements.
This discussion and analysis are intended to serve as an introduction to the Town's basic financial
statements. The Town of Oro Valley's basic financial statements are comprised of three
components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes
to the basic financial statements. This report also contains other supplementary information in
addition to the basic financial statements themselves.
Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the Town's finances, in a manner similar to
a private-sector business.
The statement of net assets presents information on all of the Town of Oro Valley's assets and
liabilities, with the difference between assets and liabilities reported as net assets. Over time,
increases or decreases in net assets may serve as useful indicators of whether the financial
position of the Town of Oro Valley is improving or declining.
15
The statement of activities presents information about how the government's net assets changed
during the most recent fiscal year. Changes in net assets are reported when the underlying event
giving rise to the change occurs, regardless of the timing of related cash flows. Thus, certain
revenues and expenses reported in this statement will result in cash flows in future periods (e.g.,
uncollected court fines and earned but unused vacation leave).
The government-wide financial statements distinguish functions of the Town of Oro Valley that
arep rinci all supported bylocal taxes and intergovernmental revenues (governmental activities)
p Y pp
from other functions that are intended to recover all or a significant portion of their costs through
user fees and charges (business-type activities). The governmental activities of the Town of Oro
Valley include general government, public safety, highways and streets and culture and
recreation. The business-type activities of the Town of Oro Valley include the Oro Valley Water
Utility and Stormwater Utility.
The government-wide financial statements include not only the Town of Oro Valley itself
(known as the primary government), but also a legally separate Town of Oro Valley Municipal
Property Corporation (MPC). The Town has a contractual obligation for the repayment of the
Municipal Property Corporation's Municipal Facilities Revenue Bonds, Series 1996, 1999 and
2001. These activities are accounted for in the Oro Valley Water Utility enterprise fund.
The government-wide financial statements can be found on pages 26 -27 of this report.
Fund financial statements A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The Town
of Oro Valley, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the Town of
Oro Valley are divided into two categories: governmental funds and proprietary funds.
Governmental funds Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However,
unlike the government-wide financial statements, governmental fund financial statements focus
on near-term inflows and outflows of spendable resources, as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating a
government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements.
By doing so readers may better understand the long-term impact of the government's near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
16
The Town of Oro Valley maintains ten individual governmental funds. Information is presented
separately in the governmental fund balance sheet and in the governmental fund statement of
revenues, expenditures, and changes in fund balances for the General Fund, Highway User
Revenue Fund (HURF), Public Transportation Fund and Townwide Roadway Development
Impact Fees Fund which are considered to be major funds. Data from the other six governmental
funds are combined into a single, aggregated presentation. Individual fund data for each of these
nonmajor governmental funds is provided in the form of combining statements elsewhere in this
report.
The Town of Oro Valley adopts an annual appropriated budget for its General Fund, certain
Special Revenue Funds, the Debt Service Fund and Capital Project Funds. The level of
budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated
amount) is the departmental level for the General Fund and in total by fund for the other funds.
The Town also maintains an encumbrance accounting system as one method of maintaining
budgetary control. Encumbered amounts lapse at year end. However, outstanding encumbrances
generally are reappropriated as part of the subsequent year's budget. Budget-to-actual
comparisons are provided in this report for each individual governmental fund for which an
appropriated annual budget has been adopted. For the General Fund and Special Revenue Funds
reported as major funds (HURF and the Public Transportation Funds), this comparison is
presented on pages 32 - 34 as part of the basic financial statements for the governmental funds.
Budgetary comparisons for all Non-major Governmental Funds with appropriated annual budgets
are presented in the Combining and Individual Fund Statements and Schedules of this report on
pages 66 - 69.
As demonstrated by the statements and schedules included in the financial section of this report,
the Town of Oro Valley continues to meet its responsibility for sound financial management.
The basic governmental fund financial statements can be found on pages 28 - 31 of this report.
Proprietary funds The Town of Oro Valley maintains two different types of proprietary funds.
Enterprise funds are used to report the same functions presented as business-type activities in the
government-wide financial statements. The Town of Oro Valley uses enterprise funds to account
for its Oro Valley Water Utility and Stormwater Utility.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
information for the Oro Valley Water Utility and the Stormwater Utility.
The basic proprietary fund financial statements can be found on pages 35 - 37 of this report.
Notes to the basic financial statements The notes provide additional information that is
essential to a full understanding of the data provided in the government-wide and fund financial
statements. The notes to the financial statements can be found on pages 39 - 57 of this report.
17
Other information In addition to the basic financial statements and accompanying notes, this
report also presents certain required supplementary information concerning the Town of Oro
Valley's progress in funding the Arizona Public Safety Retirement System available to
commissioned police officers and the Correction Officers Retirement Plan for police dispatchers.
Required supplementary information can be found on page 60 of this report.
The combining statements referred to earlier in connection with nonmajor governmental funds
are presented immediately following the required supplementary information. Combining and
individual fund statements and schedules can be found on pages 64 - 69 of this report.
Government-wide Financial Analysis
As noted earlier, over time net assets may serve as useful indicators of a government's financial
position. In the case of the Town of Oro Valley, assets exceeded liabilities by $54,903,752 at the
close of FY 2002/03.
By far the largest of the Town of Oro Valley's net assets (45 percent) reflects its investments in
capital assets (e.g., land, buildings, machinery and equipment), less any related outstanding debt
used to acquire those assets. The Town of Oro Valley uses capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the Town of
Oro Valley's investment in capital assets is reported net of related debt, the resources needed to
repay this debt must be provided from other sources, since the capital assets themselves cannot
be used to liquidate these liabilities.
Town of Oro Valley's Net Assets
Governmental Business-type
Activities Activities
2003 2003 Total
Current and other assets $ 19,287,825 $ 16,101,546 $ 35,389,371
Capital assets 33,668,131 46,282,997 79,951,128
Total assets 52,955,956 62,384,543 115,340,499
Long-term liabilities outstanding 13,187,933 42,585,433 55,773,366
Other liabilities 2,447,747 2,215,634 4,663,381
Total liabilities 15,635,680 44,801,067 60,436,747
Net assets:
Invested in capital assets,net of related debt 21,188,015 3,745,153 24,933,168
Restricted 2,303,550 3,575,789 5,879,339
Unrestricted 13,828,711 10,262,534 24,091,245
Total net assets S. 37,320,276 $ 17,583,476 $ 54,903,752
An additional portion of the Town of Oro Valley's net assets (11 percent) represents resources
that are subject to external restrictions. The remaining balance of unrestricted net assets
($24,091,245) may be used to meet the government's ongoing obligations to citizens and
creditors.
At the end of the current fiscal year, the Town of Oro Valley had positive net assets, both for the
government as a whole, as well as for its separate governmental and business-type activities.
18
The Town's net assets increased by $4,981,524 during the current fiscal year. This increase is
primarily due to a positive increase in cash flows.
Governmental and Business-type Activities Governmental activities and Business-type
Activities increased the Town of Oro Valley's net assets by $1,628,238 and $3,353,286,
respectively. A summary of the change in net assets follows. However, a prior-year comparison
of the Town's government-wide revenues and expenses is not available as this is the Town's first
year to implement government-wide financial statements. An analysis of the governmental and
enterprise funds has been presented in this discussion and analysis and comparative analysis of
government-wide revenues and expenses will be presented in the subsequent years' reports.
Town of Oro Valley's Change in Net Assets
Governmental Business-type
Activities Activities
2003 2003 Total
Revenues:
Program Revenues
Fees,fines and charges for services $ 3,112,589 $ 10,3 80,795 $ 13,493,3 84
Operating grants and contributions 3,512,097 297,500 3,809,597
Capital grants and contributions 1,520,898 1,856,151 3,377,049
General Revenues
Taxes
Sales taxes 5,876,309 - 5,876,309
Franchise taxes 341,489 - 341,489
Impact Fees 885,371 - 885,371
State revenue sharing 3,161,005 - 3,161,005
State sales tax revenue sharing 2,322,772 - 2,322,772
Auto lieu tax revenue sharing 1,307,305 - 1,307,305
Investment earnings (244,770) (50,977) (295,747)
Gain on sale of fixed assets (30,525) - (30,525)
Total Revenues 21,764,540 12.483.469 34,248,009
Expenses:
General government 5,592,498 - 5,592,498
Public safety 9,013,391 - 9,013,391
Highways and streets 2,613,170 - 2,613,170
Culture and recreation 2,352,445 - 2,352,445
Interest on long-term debt 564,798 - 564,798
Water - 9,025,235 9,025,235
Stormwater drainage - 104,948 104,948
Total Expenses 20,136,302 9,130,183 29,266,485
Increase in net assets 1,628,238 3,353,286 4,981,524
Net assets-beginning of year 35,692,038 14,230,190 49,922,228
Net assets-end of year $, 37,320,276 $, 17,583,476 $ 54,903,752
19
Financial Analysis of the Government's Funds
The Town of Oro Valley uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
Governmental funds The focus of the Town of Oro Valley's governmental funds is to provide
information on near-term inflows, outflows, and balances of spendable resources. Such
information is useful in assessing the Town of Oro Valley's financing requirements. In
particular, unreserved fund balance may serve as a useful measure of a government's net
resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the Town of Oro Valley's governmental funds reported
combined ending unreserved fund balances of $15,802,092, a decrease of $4,586,184 in
comparison with the prior year. The unreserved fund balance includes funds designated for long-
term compensated absences ($327,100) and unemployment($220,447).
The general fund is the chief operating fund of the Town of Oro Valley. At the end of the current
fiscal year, the unreserved fund balance of the General Fund was $8,087,246, and the total fund
balance was $8,441,337. As a measure of the general fund's liquidity, it is useful to compare
both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund
balance represents 46.3% of total general fund expenditures, while total fund balance represents
48.4% of that same amount.
The fund balance of the Town of Oro Valley's general fund decreased by $1,955,857 during the
current fiscal year. Key factors in this decline are as follows:
$1.1M for the expansion and remodeling of the administration and court
buildings.
• Expenditures exceeded revenues by $1.2M.
In addition, the Townwide Roadway Development Impact Fees Fund's fund balance decreased by
$1,894,541 due to the completion of several significant road improvement projects.
Unreserved Unreserved
Fund Balance Fund Balance Increase/Decrease
Fiscal Year 2002/03 Fiscal Year 2001/02 From 2001/02
General Fund $ 8,087,246 $ 10,063,909 $ (1,976,663)
Highway User Revenue Fund 1,663,183 1,711,769 (48,586)
Public Transportation 55,696 157,627 (101,931)
Townwide Roadway Development
Impact Fees Fund 5,410,128 7,304,669 (1,894,541)
Nonmajor Governmental Funds 585,839 1150,302 (564,463)
Total Governmental Funds $ 15,802,092 $ 20,388,276 $ (4,586,184)
Proprietary funds The Town of Oro Valley's proprietary funds provide the same type of
information found in the government-wide financial statements, but in more detail.
20
Unrestricted net assets of the Oro Valley Water Utility at the end of the year amounted to
$10,035,224, and those for the Stormwater Utility amounted to $227,310. The total growth in
net assets for both funds was $3,160,659 and $192,627, respectively. Key factors to the growth
in the Water and Stormwater Utility Funds are as follows:
Oro Valley Water Utility
• Revenues from water sales increased by $423K or 5.2% from last fiscal year.
• Operating costs were under budget by$305K.
• Net income for the fiscal year was $1,305K.
• Capital contributions of $1,856 from line extension agreements with developers
are for capital improvements to the water utility's infrastructure.
• Net assets increased by$3,161K for a total of$17,356K at June 30, 2003.
• Collections from water system development impact fees totaled $1,271K.
Stormwater Utility
• $297,500 in bond proceeds was received from Pima County for the Stormwater
Utility Fund.
General Fund Budgetary Highlights
The Town of Oro Valley made no amendments to the original budget of the General Fund in
fiscal year 2002/03.
Capital Asset and Debt Administration
Capital assets The Town of Oro Valley's investment in capital assets for its Governmental and
Business-type Activities as of June 30, 2003 were $79,951,128 (net of accumulated
depreciation). This investment in capital assets includes land, buildings and improvements,
machinery, equipment and vehicles, park facilities, streets, water systems and water rights. The
net increase in the Town of Oro Valley's investment in capital assets for the current fiscal year
was $13,965,532 or 21.2%.
Town of Oro Valley's Capital Assets
(net of depreciation)
Governmental Activities
2003 2002
Land $ 10,021,765 $ 10,052,290
Infrastructure 1,468,728 -
Buildings and improvements 15,257,062 9,366,447
Machinery, equipment and vehicles 2,257,326 2,071,909
Construction in progress 4,663,250 4,671,477
Total $ 33,668,131 $ 26,162,123
21
The increase of$7.5M in governmental activities was primarily in the category of buildings and
improvements which includes the completion of the Oro Valley Public Library in the amount of
$5M and the expansion and remodeling of the administration and court buildings for $1.1M. In
addition, infrastructure is for street improvement completions during the fiscal year.
Business-type Activities
2003 2002
Land $ 103,691 $ 103,691
Water rights 6,172,361 6,172,361
Water system 38,977,680 30,456,366
Equipment and vehicles 310,036 481,115
Construction in progress 719,229 2,609,940
Total $ 46,282,997 $ 39,823,473
The increase in the business-type activities of $6.5 million is primarily due to an increase in
water system assets. The majority of water system assets were for transmission mains and
booster stations which increased system reliability. In addition, capital improvements for
reservoirs were made to help meet peak demands and fire flow capacity.
Additional information on the Town of Oro Valley's capital assets can be found in Note 3.B.4 on
pages 49 - 50 of this report.
Long-term debt At the end of the current fiscal year, the Town of Oro Valley had total bonded
debt outstanding of$55,017,960. This amount is comprised of debt backed by the full faith and
credit of the government. Governmental activities debt of $12,480,116 includes $10,764,116
which is paid with general fund revenue sources and $1,716,000 paid with Townwide Roadway
Development Impact Fees. Business-type activities are paid with water related revenue sources
such as water sales and water connection development impact fees.
Town of Oro Valley's
Outstanding Debt
Governmental Activities
2003 2002
Revenue Bonds $ 6,594,116 $ 6,941,076
Certificates of Participation 4,170,000 4,340,000
Loan Payable 1,716,000 -
Total $, 12,480\116 $ 11,281,076
22
Business-type Activities
2003 2002
Gross Revenue Bonds $ 38,155,744 $ 39,715,989
Notes Payable 4,382,100 4,869,000
Total $ 42,537,844 $ 44,584,989
The Town of Oro Valley's total debt had a net decrease of$848,105. A decrease of$2,564,105
was due to scheduled principal payments. Debt increased $1,716,000 due to the issuance of a
loan payable during the.fiscal year from the Arizona Department of Transportation which assists
area governments in the financing of road improvement projects.
The Town of Oro Valley maintains an "A" rating from Standard & Poor's and an "A+" rating
from Fitch on the revenue bonds outstanding.
Additional information on the Town of Oro Valley's long-term debt can be found on page 53 of
this report.
Economic Factors and Next Year's Budgets and Rates
• The unemployment rate for the Town of Oro Valley is currently 2.9%, which is an
increase from a rate of 2.0% a year ago. Pima County's current unemployment
rate is 3.2% and the State of Arizona is 3.4%.
• Average earnings for Oro Valley residents are $70,404.
• The average value of a home in Oro Valley is $177,400.
• The three year average in secondary assessed valuation increased by 14% from
$221 million in FY 2000/01 to $327 million in FY 2003/04.
• The current population of 37,260 has increased by 459% compared to a
population of 6,670 in 1990.
The Town of Oro Valley's budget for FY 2003/04 fiscal year totaled $103,219,856 which
increased by $19,671,641 as compared to FY 2002/03. Most of this increase is related to the Oro
Valley Water Utility for bonds that will be issued in the amount of$16 million for infrastructure
needed to build a reclaimed water delivery system.
The General Fund's budgeted expenditures decreased by $530,000 compared to last fiscal year.
This was mainly due to a decrease in personnel costs and capital improvements.
23
Requests for Information
This financial report is designed to provide a general overview of the Town of Oro Valley's
finances for all those with an interest in the government's finances. Questions concerning any of
the information provided in this report of requests for additional financial information should be
addressed to the following:
David Andrews, Finance Director or
Mary Rallis, Accounting Supervisor
Town of Oro Valley
11,000 N. La Canada Drive
Oro Valley, Arizona 85737
24
Basic Financial Statements
25
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF NET ASSETS
JUNE 30, 2003
Governmental Business-type
Activities Activities Totals
Assets
Cash and cash equivalents $ 16,940,518 $ 10,649,699 $ 27,590,217
Receivables,net of allowance for doubtful accounts
Accounts receivable 659,297 1,191,107 1,850,404
Taxes receivable 597,608 - 597,608
Intergovernmental receivable 699,973 - 699,973
Interest receivable 31,259 15,172 46,431
Internal balances 330,729 (330,729) -
Inventories 5,079 - 5,079
Prepaid items 23,362 - 23,362
Deferred charges - 920,692 920,692
Restricted assets - 3,655,605 3,655,605
Capital assets
Non-depreciable 14,685,015 6,995,281 21,680,296
Depreciable(net) 18,983,116 39.287.716 58.270,832
Total assets 52.955,956 62,384,543 115,340,499
Liabilities
Accounts payable 728,716 311,674 1,040,390
Accrued wages and benefits 483,025 54,632 537,657
Interest payable - 1,036,877 1,036,877
Intergovernmental payable 28,371 327,635 356,006
Unearned revenue 193,736 - 193,736
Customer deposits payable 1,013,899 79,816 1,093,715
Matured debt principal payable - 405,000 405,000
Noncurrent liabilities
Due within one year 922,007 1,379,532 2,301,539
Due in more than one year 12.265,926 41,205,901 53,471,827
Total liabilities 15,635,680 44,801.067 60,436,747
Net assets
Invested in capital assets,net of related debt 21,188,015 3,745,153 24,933,168
Restricted for
Public safety 135,439 - 135,439
Highways and streets 1,717,711 - 1,717,711
Debt service 176,514 2,995,635 3,172,149
Capital outlay 28,000 - 28,000
Replacement and reserve - 580,154 580,154
Other 245,886 - 245,886
Unrestricted 13,828,711 10.262.534 24,091,245
Total net assets $ 37.320.276 $ 17.583,476 $ 54,903.752
The notes to the basic financial statements are an integral part of this statement.
26
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TOWN OF ORO VALLEY, ARIZONA
BALANCE SHEET
GOVERNMENTAL FUNDS
JTJNE 30, 2003
Townwide
Roadway Nonmajor
Public Development Governmental
General HURF Transportation Impact Fees Funds Totals
Assets
Cash and cash equivalents $ 7,189,396 $ 1,580,084 $ 354,217 $ 5,474,927 $ 2,341,894 $ 16,940,518
Receivables,net
Accounts receivable 620,044 4,253 - 35,000 - 659,297
Taxes receivable 597,608 - - - - 597,608
Intergovernmental receivable 506,472 193,501 - - - 699,973
Interest receivable 15,196 2,835 139 10,140 2,949 31,259
Due from other funds 1,081,751 - - - - 1,081,751
Inventories - 5,079 - - - 5,079
Prepaid items 23,362 - - - - 23,362
Advances to other funds 330,729 - - - - 330,729
Total assets $, 10,364.558 $, 1.785.752 $ 354.356 $. 5.520,067 $ 2,344,843 $ 20,369,576
Liabilities and Fund Balances
Liabilities
Accounts payable $ 566,198 $ 49,741 $ 10,617 $ 99,479 $ 2,681 $ 728,716
Accrued wages and benefits 425,734 42,184 8,542 6,565 - 483,025
Intergovernmental payable 27,531 - - - 840 28,371
Due to other funds - - 273,921 - 807,830 1,081,751
Deferred revenue 491,835 - - - - 491,835
Customer deposits payable 66,044 202 - - 947,653 1,013,899
Compensated absences-current 345.879 25,363 5,580 3.895 - 380.717
Total liabilities 1,923.221 117,490 298,660 109.939 1,759,004 4.208 314
Fund balances
Reserved for: - - - - - -
Inventories - 5,079 - - - 5,079
Prepaid items 23,362 - - - - 23,362
Advances 330,729 - - - - 330,729
Unreserved:
Undesignated 7,571,947 1,635,627 51,870 5,409,262 - 14,668,706
Designated for long-term
compensated absences 319,987 4,500 1,747 866 - 327,100
Designated for unemployment 195,312 23,056 2,079 - - 220,447
Unreserved,reported in nonmajor:
Special revenue funds - - - - 381,325 381,325
Debt service funds - - - - 176,514 176,514
Capital projects funds - - - - 28.000 28,000
Total fund balances 8,441,337 1,668.262 55.696 5,410.128 585.839 16,161.262
Total liabilities and fund balances $ 10,364.558 $ 1,785,752 $ 354.356 $2. 5.520.067 $ 2,344.843 $ 20,369,576
The notes to the basic financial statements are an intergral part of this statement.
28
TOWN OF ORO VALLEY, ARIZONA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2003
Fund balances-total governmental funds $ 16,161,262
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in
the governmental funds.
Governmental capital assets 38,106,704
Less accumulated depreciation (4_438.573)
Capital assets used in governmental activities 33,668,131
Other long-term assets are not available to pay for current-period expenditures and are not susceptible to
accrual. 298,099
Long-term liabilities,including bonds payable,are not due and payable in the current period and
therefore are not reported in the governmental funds.
Revenue bonds (6,594,116)
Certificates of participation (4,170,000)
Loans payable (1,716,000)
Long-term compensated absences (327.100)
Net assets of governmental activities $ 37,320,276
The notes to the basic financial statements are an integral part of this statement.
29
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Townwide
Roadway Nonmaj or
Public Development Governmental
General HURF Transportation Impact Fees Funds Totals
Revenues
Taxes
Sales taxes $ 5,876,309 $ - $ - $ - $ - $ 5,876,309
Franchise taxes 341,489 - - - - 341,489
Intergovernmental 7,589,237 2,350,568 326,043 1,520,898 - 11,786,746
Fines and forfeitures 225,207 - - - 82,363 307,570
Licenses and permits 1,759,118 25,450 - - - 1,784,568
Charges for services 598,383 4,358 30,665 - - 633,406
Contributions and donations 37,331 - - - - 37,331
Impact fees - - - 885,371 - 885,371
Investment earnings(loss) (109,421) (27,183) (1,735) (92,796) (13,635) (244,770)
Other 117365 5386 - 55,625 - 178,376
Total Revenues 16,435.018 2,358,579 354,973 2.369.098 68,728 21,586.396
Expenditures
Current
General government 6,330,236 - - - 367,816 6,698,052
Public safety 8,724,667 - - - 71,976 8,796,643
Highways and streets - 2,402,086 510,305 5,979,639 - 8,892,030
Culture and recreation 2,394,212 - - - - 2,394,212
Debt Service
Principal retirement - - - - 516,960 516,960
Interest on long-term debt - - - -
564.798 564.798
Total Expenditures 17,449.115 2.402,086 510.305 5.979.639 1,521.550 27.862.695
Excess(deficiency)of revenues
over expenditures (1,014,097) (43,507) (155,332) (3.610.541) (1,452.822) (6.276.299)
Other financing sources(uses)
Transfers in 193,194 - 53,401 - 1,081,553 1,328,148
Transfers out (1,134,954) - - - (193,194) (1,328,148)
Proceeds from loan - - - 1,716.000 - 1.716.000
Total other financing sources
(uses) (941,760) - 53.401 1,716.000 888.359 1,716.000
Net change in fund balances (1,955,857) (43,507) (101,931) (1,894,541) (564,463) (4,560,299)
Fund balances,beginning of year 10.397 194 1.711,769 157 627 7,304.669 1.150.302 20,721.561
Fund balances,end of year $ 8,441,337 $ 1.668 262 $, 55.696 $, 5,410.128 $, 585.839 $ 16.161.262
The notes to the basic financial statements are an integral part of this statement.
30
TOWN OF ORO VALLEY, ARIZONA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Net change in fund balances-total governmental funds $ (4,560,299)
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However,in the statement of activities the
cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.
Expenditures for capital assets 8,544,310
Less current year depreciation (1,007.777)
Excess capital expenditures over depreciation 7,536,533
The statement of activities reports losses arising from the disposal of existing capital assets. Conversely,
governmental funds do not report any gain or loss on disposals of capital assets. (30,525)
Some revenues reported in the statement of activities do not provide current financial resources and
therefore are not reported as revenues in governmental funds.
Court fines 208,669
The issuance of long-term debt(e.g.bonds,leases)provides current financial resources to governmental
funds,while the repayment of the principal of long-term debt consumes the current financial resources of
governmental funds. Neither transaction,however,has any effect on net assets. The issuance of long-
term debt increases long-term liabilities on the statement of net assets and the repayment of principal on
long-term debt reduces long-term debt on the statement of net assets. Also,governmental funds report
the effect of issuance costs,premiums,discounts,and similar items when the debt is first issued,whereas
these items are deferred and amortized over the term of the long-term debt in the statement of activities.
Principal payments on long-term debt 516,960
Proceeds of loans payable (1,716,000)
Some expenses reported in the statement of activities do not require the use of current financial resources
and therefore are not reported as expenditures in the governmental funds.
Long-term compensated absences (327,100)
Change in net assets of governmental activities $ 1.628.238
The notes to the basic financial statements are an integral part of this statement.
31
TOWN OF ORO VALLEY, ARIZONA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Original and Final Variance with Final
Budget Actual Budget
Revenues
Taxes
Sales taxes $ 5,982,000 $ 5,876,309 $ (105,691)
Franchise taxes 300,000 341,489 41,489
Intergovernmental 7,579,019 7,589,237 10,218
Fines and forfeitures 200,000 225,207 25,207
Licenses and permits 1,852,000 1,759,118 (92,882)
Charges for services 395,384 598,383 202,999
Contributions and donations 500 37,331 36,831
Investment earnings(loss) 275,000 (109,421) (384,421)
Other 63,000 117,365 54.365
Total Revenues 16,646,903 16.435,018 (211.885)
Expenditures
Current
General government
Town council 146,120 137,849 8,271
Town clerk 290,299 239,448 50,851
Magistrate court 495,824 431,484 64,340
Town manager 343,778 320,585 23,193
Finance 465,676 422,418 43,258
Legal 609,471 462,119 147,352
Planning and zoning 904,817 770,496 134,321
General administration 7,036,772 1,530,572 5,506,200
Custodial facility maintenance 153,163 145,319 7,844
Economic development 797,864 551,770 246,094
Community development administration 389,463 369,256 20,207
Human resources 226,747 225,567 1,180
Information systems 353,423 340,317 13,106
Geographical information systems 125,596 87,609 37,987
Public works 336,596 295.427 41.169
Total general government 12,675.609 6,330.236 6.345.373
Public safety
Police 8,223,357 7,790,861 432,496
Building safety 1.106.230 933.806 172.424
Total public safety 9,329.587 8,724.667 604,920
Culture and recreation
Parks and recreation 1,501,917 1,666,067 (164,150)
Library 1.006,717 728.145 278.572
Total culture and recreation 2,508.634 2.394.212 114.422
Total Expenditures 24.513.830 17,449}115 7.064.715
Excess(deficiency)of revenues over expenditures (7.866.927) (1,014.097) 6,852,830
Other financing sources(uses)
Transfers in - 193,194 193,194
Transfers out (1,134,954) (1,134.954) -
Total other financing sources(uses) (1,134,954) (941.760) 193.194
Net change in fund balances (9,001,881) (1,955,857) 7,046,024
Fund balances,beginning of year 9.001.881 10,397,194 1,395,313
Fund balances,end of year $, - , $, 8.441,337 $ 8.441.337
The notes to the basic financial statements are an integral part of this statement.
32
TOWN OF ORO VALLEY, ARIZONA
HURF FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Original and Final Variance with Final
y Budget Actual Budget
Revenues
' Intergovernmental $ 2,475,000 $ 2,350,568 $ (124,432)
Licenses and permits 12,000 25,450 13,450
Charges for services 12,000 4,358 (7,642)
Investment earnings(loss) 20,000 (27,183) (47,183)
Other 5.000 5,386 386
Total Revenues 2.524.000 2,358.579 (165.421)
Expenditures
Current
Highways and streets 3.741.751 2.402086 1.339,665
Total Expenditures 3.741.751 2.402,086 1.339.665
Excess(deficiency)of revenues over expenditures (1,217,751) (43,507) 1,174,244
Fund balances,beginning of year 1.217.751 1.711.7 69 494,018
Fund balances,end of year $ - $ 1,668,262 $ 1.668.262
The notes to the basic financial statements are an integral part of this statement.
33
TOWN OF ORO VALLEY, ARIZONA
PUBLIC TRANSPORTATION FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Original and Final Variance with Final
Budget Actual Budget
Revenues
Intergovernmental $ 371,950 $ 326,043 $ (45,907)
Charges for services 30,000 30,665 665
Investment earnings(loss) 2,000 (1,735) (3,735)
Total Revenues 403,950 354,973 (48,977)
Expenditures
Current
Highways and streets 584,418 510,305 74,113
Total Expenditures 584,418 510.305 74.113
Excess(deficiency)of revenues over expenditures (180,468) (155.332) 25,136
Other financing sources(uses)
Transfers in 53,401 53.401 -
Total other financing sources(uses) 53,401 53,401
Net change in fund balances (127,067) (101,931) 25,136
Fund balances,beginning of year 127,067 157,627 30.560
Fund balances,end of year $ - $ 55.696 $ 55.696
The notes to the basic financial statements are an integral part of this statement.
34
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2003
Stormwater
Water Drainage Totals
Assets
Current assets
Cash and cash equivalents $ 10,421,989 $ 227,710 $ 10,649,699
Receivables,net
Accounts receivable 1,191,107 - 1,191,107
Interest receivable 15,172 - 15,172
Deferred charges 920,692 - 920,692
Restricted assets 3,655,605 - 3,655,605
Noncurrent assets
Capital assets
Non-depreciable 6,995,281 - 6,995,281
Depreciable(net) 39,287,716 - 39.287.716
Total Assets 62,487,562 227.710 62,715,272
Liabilities
Current liabilities
Accounts payable 311,674 - 311,674
Accrued wages and benefits 54,632 - 54,632
Interest payable 1,036,877 - 1,036,877
Intergovernmental payable 32.7,235 400 327,635
Customer deposits payable 79,816 - 79,816
Matured debt principal payable 405.000 - 405,000
Compensated absences-current 36,717 - 36,717
Bonds,notes and loans payable-current 1,312,815 - 1,342,815
Noncurrent liabilities
Compensated absences 10,872 - 10,872
Bonds,notes and loans payable 41.195,029 - 41,195,029
Advances from other funds 330,729 - 330329
Total liabilities 45.131.396 400 45,131396
Net assets
Invested in capital assets,net of related debt 3,745,153 - 3,745,153
Restricted for
Replacement and reserve 580,154 - 580,154
Debt service 2,995,635 - 2.995,635
Unrestricted 10,035.224 227.310 10.262.534
Total net assets $ 17.356,166 $ 227,310 $ 17.583.476
The notes to the basic financial statements are an integral part of this statement.
35
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Stormwater
Water Drainage Totals
Operating revenues
Charges for services $ 9,079,788 $ - $ 9.079 788
Total operating revenues 9,079,788 - 9,079,788
Operating expenses
Costs of sales and services 5,077,155 104,948 5,182,103
Depreciation and amortization 1,552,721 - 1.552,721
Total operating expenses 6.629,876 104,948 6.734,824
Operating income(loss) 2,449,912 (104,948) 2,344,964
Nonoperating revenues(expenses)
Connection fees 1,082,727 - 1,082,727
Impact fees 188,250 - 188,250
Intergovernmental - 297,500 297,500
Investment earnings(loss) (50,977) - (50,977)
Interest expense (2,395,359) - (2,395,359)
Miscellaneous nonoperating revenues 29.955 75 30.030
Total nonoperating revenues(expenses) (1.145,404) 297.575 (847,829)
Income before contributions 1,304,508 192,627 1,497,135
Capital contributions 1,856,151 - 1,856,151
Change in net assets 3,160,659 192,627 3,353,286
Total net assets,beginning of year 14,195,507 34,683 14,230,190
Total net assets,end of year $ 17.356.166 $ 227,310 $ 17.583.476
The notes to the basic financial statements are an integral part of this statement.
36
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Storm Water
Water Drainage Totals
Cash flows from operating activities
Receipts from customers $ 9,221,216 $ - $ 9,221,216
Payments to suppliers (3,752,685) (104,948) (3,857,633)
Payments to employees (1,477,968) - (1,477,968)
Connection fees 1,082,727 - 1,082,727
Impact fees 188,250 - 188,250
Intergovernmental revenues - 297,900 297,900
Other revenue 29,955 75 30,030
Customer deposits 4.958 - _ 4.958
Net cash flows from operating activities 5,296,453 193,027 5.489.480
Cash flows from capital and financing activities
Purchases of capital assets (6,094,421) - (6,094,421)
Principal paid on capital debt (2,079,940) - (2,079,940)
Interest paid on capital debt (2,435.999) - (2,435.999)
Net cash flows from capital and financing
activities (10.61 0.360) - (10.610.360)
Cash flows from investing activities
Investment earnings(loss) (40,311) - (40,311)
Net cash flows from investing activities (40.311) - (40,311)
Net change in cash and cash equivalents (5,354,218) 193,027 (5,161,191)
Cash and cash equivalents,beginning of year 19,431.812 34,683 19,466,495
Cash and cash equivalents,end of year(including
$3,655,605 of restricted assets in the Water
Fund) $ 14.077.594 $ 227,710 $ 14.305.304
Reconciliation of operating income(loss)to net
cash provided by operating activities
Operating income(loss) $ 2,449,912 $ (104,948) $ 2,344,964
Adjustments to reconcile operating income(loss)
to net cash provided(used)by operating
activities:
Depreciation and amortization 1,552,721 - 1,552,721
Connection fees 1,082,727 - 1,082,727
Impact fees 188,250 - 188,250
Intergovernmental revenues - 297,500 297,500
Nonoperating receipts(payments) 29,955 75 30,030
Change in assets/liabilities:
Receivables,net 67,567 - 67,567
Accounts payable (194,588) - (194,588)
Intergovernmental payable 73,861 400 74,261
Accrued payroll and related benefits 36,799 - 36,799
Compensated absences 4,291 - 4,291
Customer deposits " 4,958 - 4.958
Net cash provided by operating activities $_ 5.296.453 $ 193.027 $ 5.489.480
Non-cash and investing activities
Bond issuance costs of $43,878 were amortized during the year. In addition, the Town received
$1,856,151 in assets contributed by developers recorded as capital contributions in the Statement of
Revenues,Expenses and Changes in Fund Net Assets.
The notes to the basic financial statements are an integral part of this statement.
37
THIS PAGE BLANK
38
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING UNTING POLICIES
The accompanying financial statements of the Town of Oro Valley, Arizona (Town) have been
prepared in conformity with U.S. generally accepted accounting principles applicable to
governmental units adopted by the Governmental Accounting Standards Board (GASB). A
summary of the Town's more significant accounting policies follows.
A. Reporting Entity
The Town is a municipal government that is governed by a separately elected governing body.
It is legally separate from and fiscally independent of other state and local governments. The
accompanying financial statements present the Town and its component units, entities for
which the Town is considered to be financially accountable. Blended component units,
although legally separate entities, are, in substance, part of the Town's operations.
Included within the reporting entity:
The Town of Oro Valley Municipal Property Corporation - The Town of Oro Valley Municipal
Property Corporation's (MPC) board of directors consists of the three members which are •
appointed by the Town of Oro Valley Town Council. The MPC, which is a nonprofit
corporation incorporated under the laws of the State of Arizona, was originally formed for the
purpose of assisting the Town in obtaining financing for acquiring the Canada Hills Rancho
Vistoso water companies. The Town has a contractual obligation for the repayment of the
Municipal Property Corporation's Municipal Facilities Revenue Bonds, Series 1996 and 1999.
The activity of the 1996 MPC is reported in the applicable water enterprise fund and the activity
of the the Series 1999 MPC is reported in the applicable water enterprise and governmental
funds. All related receivables and payables between the Town and the MPC have been
eliminated.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the statement of
changes in net assets) report information on all of the nonfiduciary activities of the primary
government and its component units. The effect of interfund activity has been removed from
these statements. Governmental activities are normally supported by taxes and
intergovernmental revenues.
39
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or segment.
Taxes and other items not properly included among program revenues are reported instead as
general revenues.
Separate financial statements are provided for governmental funds. Major individual
governmental funds are reported as separate columns in the fund financial statements.
C. Measurement focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash
flows. Property taxes are recognized as revenues in the year for which they are levied. Grants
and similar items are recognized as revenue as soon as all eligibility requirements imposed by
the provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the Town considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting, except expenditures related
to compensated absences and claims and judgments, which are recorded only when payment is
due. However, since debt service resources are provided during the current year for payment of
general long-term principal and interest due early in the following year, the expenditures and
related liabilities have been recognized in the Debt Service Funds.
Taxes, intergovernmental grants and aid, and interest associated with the current fiscal period
are all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. All other revenue items are considered to be measurable and available
only when cash is received by the government.
The Town reports the following major governmental funds:
The General Fund is the Town's primary operating fund. It accounts for all financial
resources of the Town, except those required to be accounted for in another fund.
40
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
The Highway Users Revenue Fund (HURF) accounts for the operations of the street
maintenance department. Financing is provided by the Town's share of state gasoline
taxes. State law requires these gasoline taxes be used to maintain streets.
The Public Transportation Fund accounts for the operation of the Town's public
transportation system.
The Townwide Roadway Development Impact Fees Fund accounts for the collection
and capital expenditures of the Townwide Roadway Development Impact Fees.
The Town reports the following major proprietary funds:
The Water Fund accounts for the costs to operate, construct and finance the Town's
water system.
The Stormwater Drainage Fund accounts for the costs to operate, construct and finance
the Town's storm drainage. In addition, it accounts for the cost to educate the public
relating to storm drainage water as required by the E.P.A.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in the government-wide financial statements to the extent that those
standards do not conflict with or contradict guidance of the Governmental Accounting
Standards Board.
As a general rule the effect of interfund activity has been eliminated from the government-wide
financial statements.
Amounts reported as program revenues include 1) charges for services, 2) operating grants and
contributions, and 3) capital grants and contributions. Internally dedicated resources are
reported as general revenues rather than as program revenues. Likewise, general revenues
include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund's principal ongoing operations. All
revenues and expenses not meeting this definition are reported as nonoperating revenues and
expenses.
When both restricted and unrestricted resources are available for use, for governmental
activities it is the Town's policy to use restricted resources first, then unrestricted resources as
they are needed.
41
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
D. Assets, Liabilities, and Net Assets or Equity
1. Deposits and Investments
The Town's cash and cash equivalents are considered to be cash on hand, demand deposits, cash
and investments held by the State Treasurer, and highly liquid investments with maturities of
three months or less from the date of acquisition.
Cash and investments are pooled except for funds required to be held by fiscal agents or
restricted under provisions of bond indentures. Interest earned from investments purchased
with such pooled monies is allocated to each of the funds based on the average daily cash
balances. State statutes authorize the Town to invest in obligations of the U.S. Treasury and
U.S. agencies, certificates of deposit in eligible depositories, repurchase agreements,
obligations of the State of Arizona or any of its counties or incorporated cities, towns or duly
organized school districts, improvement districts in this state and the State Treasurer's Local
Government Investment Pool.
2. Receivables
All trade accounts receivables are recorded net of allowance for doubtful accounts.
3. Short-term Interfund Receivables/Payables
During the course of operations, individual funds within the Town's pooled cash accounts may
borrow money from the other funds within the pool on a short-term basis. These receivables
and payables are classified as "due from other funds" or "due to other funds" on the balance
sheet of the fund financial statements and are eliminated in the preparation of the government-
wide financial statements.
4. Inventories and Prepaid Items
Inventories consist of expendable supplies held for consumption. Inventories are valued at cost
using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as
expenditures when consumed rather than when purchased.
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both government-wide and fund financial statements.
5. Restricted Assets
Certain proceeds of the Town's bonds, as well as certain resources set aside for their repayment,
are classified as restricted assets on the statement of net assets because their use is limited by
applicable bond covenants.
42
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
6. Capital Assets
Capital assets, which include property, plant, and equipment, are reported in the governmental
activities column in the government-wide financial statements. Capital assets are defined by
the Town as assets with an initial, individual cost of more than $5,000 and an estimated useful
life in excess of one year.
Property, plant and equipment purchased or acquired is carried at historical cost or estimated
historical cost. Contributed assets are recorded at fair market value as of the date received.
Additions, improvements and other capital outlays that significantly extend the useful life of an
asset are capitalized. Other costs incurred for repairs and maintenance are expensed as
incurred.
General infrastructure assets acquired prior to July I, 2002 are not reported in the basic
financial statements. Those assets will be transitioned in over the next four fiscal years in
accordance with GASB Statement No. 34.
Depreciation on all assets is provided on a straight-line basis over the following estimated
useful lives:
Buildings 50 years
Improvements other than buildings 20 years
Infrastructure 50 years
Furniture, machinery and equipment 5 years
Vehicles 5 years
7. Compensated Absences
The liability for compensated absences reported in the government-wide statements consists of
unpaid, accumulated leave balances. The liability has been calculated using the vesting
method, in which leave amounts for both employees who currently are eligible to receive
termination payments and other employees who are expected to become eligible in the future to
receive such payments upon termination are included.
8. Long-Term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations
are reported as liabilities in the applicable governmental activities. Bond premiums and
discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using
the straight line method. Bonds payable are reported net of the applicable bond premium or
discount. Bond issuance costs are reported as deferred charges and amortized over the term of
the related debt.
43
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are reported
as other financing sources while discounts on debt issuances are reported as other financing
uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are
reported as debt service expenditures.
9. Net Assets
In the government-wide financial statements, net assets are reported in three categories: net
assets invested in capital assets, net of related debt; restricted net assets; and unrestricted net
assets. Net assets invested in capital assets, net of related debt is separately reported because
the Town reports all Town assets which make up a significant portion of total net assets.
Restricted net assets account for the portion of net assets restricted by parties outside the Town.
Unrestricted net assets are the remaining net assets not included in the previous two categories.
10. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally restricted by outside parties for
use for a specific purpose. Designations of fund balance represent tentative management plans
that are subject to change.
NOTE 2 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Budgetary Information
The Town Council follows these procedures in establishing the budgetary data reflected in the
financial statements:
1. In accordance with Arizona Revised Statutes, the Town Manager submits a proposed
budget for the fiscal year commencing the following July 1 to the Town Council. The
operating budget includes proposed expenditures and the means of financing them for
the upcoming year.
2. Public hearings are conducted to obtain taxpayer comment.
44
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
3. Prior to the second Monday in August, the expenditure limitation of the Town is legally
enacted through the adopting of the budget. To ensure compliance with the State
imposed expenditure limitation, a uniform expenditure report must be filed with the
State each year. This report, issued under a separate cover, reconciles total Town
expenditures from the audited financial statements to total expenditures for reporting in
accordance with the State's uniform expenditure reporting system (A.R.S. §41-1279.07).
4. Expenditures may not legally exceed the expenditure limitation of all fund types as a
whole. For management and legal purposes, the Town Council adopts a budget by
department for the General Fund and in total by fund for all funds for which a budget is
adopted. The Town Manager, subject to Town Council approval, may at any time
transfer various unencumbered appropriation balances or portions thereof between a
departments or activity. The adopted budget cannot be amended in any way without
Town Council approval.
5. Formal budgetary integration is employed as a management control device during the
year on the same modified accrual basis of accounting used to record actual revenues
and expenditures.
The Town is subject to the State of Arizona's Spending Limitation Law for Towns and Cities.
This law does not permit the Town to spend more than budgeted revenues plus the carry-over
unrestricted cash balance from the prior fiscal year. The limitation is applied to the total of the
combined funds. The Town complied with this law during the year.
No supplementary budgetary appropriations were necessary during the year.
B. Excess of Expenditures Over Appropriations
Expenditures exceeded appropriations in the following funds:
Amount of
Overexpenditure
General Fund:
Parks and recreation $ 164,150
45
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
NOTE 3 - DETAILED NOTES ON ALL FUNDS
A. Change in Accounting Policy and Prior Period Adjustment
The Town implemented GASB 34 for the fiscal year ended June 30, 2003. The following
adjustments were made in order to properly state beginning net assets using the full accrual
method of accounting.
Fund balances at June 30, 2002, governmental fund types $ 20,721,5 61
GASB Statement No. 34 adjustments:
Net long-term capital assets 26,162,123
Accounts receivable - court 8 9,43 0
Revenue bonds (6,941,076)
Certificates of participation (4,340,000)
Net assets of governmental funds at July 1, 2002 $ 35,692.038
A prior period adjustment was necessary to record the activity of three funds previously
reported in the governmental funds as business-type activities. The following summary is
useful to reconcile beginning fund balance in the governmental funds and beginning net assets
in the enterprise funds to the prior year audited financial statements.
Enterprise Funds
Governmental Water Stormwater
Funds Fund Drainage Fund Total
Beginning fund balance/Net
Assets(as previously stated) $ 28,550,051 $ 11,362,017 $ 34,683 $ 11,396,700
Prior period adjustment:
Funds reclassification (7,828,490) 7,828,490 - 7,828,490
Long-term debt previously
reported in the general long-
term debt account group - (4,995,000) - (4,995,000)
Beginning fund balance/Net
Assets(as restated) $ 20,721,561 $ 14,195,507 $ 34,683 $ 14.230,190
46
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
B. Assets
1. Deposits and Investments
Deposits and investments at June 30, 2003 consist of the following:
Deposits
Cash on hand $ 2,900
Cash in bank 8,791,043
Cash with the County Treasurer 191,656
Investments
State Treasurer's Investment Pool 22.2 60.223
Total cash and investments 31,245,822
Restricted assets (3,65 5,605)
Total cash and equivalents $ 27,590.217
Deposits - The Town's deposits at June 30, 2003, were entirely covered by federal depository
insurance or by collateral held by the Town's custodial bank in the Town's name.
Investments - The State Board of Deposit provides oversight for the State Treasurer's pools,
and the Local Government Investment Pool Advisory Committee provides consultation and
advice to the Treasurer. The fair value of a participant's position in the pool approximates the
value of that participant's pool shares. The shares are not identified with specific investments
and are not subject to custodial credit risk. In addition, the money market mutual fund is not
subject to custodial credit risk. All other investmentsof
Jthe Town are uninsured and
unregistered with the securities held by the counterparty's trust department or agent in the
Town's name.
2. Restricted Assets
Restricted assets in the Enterprise Fund at June 30, 2003 consisted of the following:
Future debt service $ 2,995,635
Replacement reserve 580,154
Customer deposits 79,816
$ 3,655,605
47
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
3. Receivables
Governmental funds report deferred revenue in connection with receivables for revenues that
are not considered to be available to liquidate liabilities of the current period. Governmental
funds also defer revenue recognition in connection with resources that have been received, but
not yet earned. At the end of the current fiscal year, the various components of deferred
revenue and unearned revenue reported in the governmental funds were as follows:
Unavailable Unearned
Prepaid developer fees
(General Fund) $ - $ 180,635
JCEF court enhancement funds
(General Fund) - 13,101
Court fines
(General fund) 208,669 -
$ 208,669 $ 193,736
48
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
4. Capital Assets
Capital asset activity for the year ended June 30, 2003 was as follows:
Beginning Completed Ending
Balance Increases Decreases Construction Balance
Governmental Activities:
Capital assets not being depreciated:
Land $ 10,052.290 $ - $ (30,525) $ - $ 10,021,765
Construction in progress 4,671,477 4,999,070 - (5,007,297) 4,663,250
Total capital assets,
not being depreciated 14,723,767 4,999,070 _(30 5) (5,007,297) 14,685,015
Capital assets being depreciated:
Infrastructure - 1,499,764 - - 1,499,764
Buildings and improvements 10,576,007 1,247,306 - 5,007,297 16,830,610
Machinery, equipment and
vehicles 5,529,648 798,170 (1,236,503) - 5.091.315
Total capital assets being
depreciated 16,105.655 3.545.240 (1,236,503) 5,007,297 23,421,689
Less accumulated depreciation for:
Infrastructure - (31,036) - - (31,036)
Buildings and improvements (1,209,560) (363,988) - - (1,573,548)
Machinery, equipment and
vehicles (3,457.739) (612,753) 1,236,503 - (2.833.989)
Total accumulated depreciation (4,667,299) (1,007,777) 1,236,503 - (4,438.573)
Total capital assets,
being depreciated, net 11,438,356 2,537,463 - 5,007,297 18,983,116
Governmental activities
capital assets, net S 26,162,123 $ 7,536,533 $ (30,525) S. - $ 33,668,131
49
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
Beginning Completed Ending
Balance Increases Decreases Construction Balance
Business-type Activities:
Capital assets not being
depreciated:
Land $ 103,691 $ - $ - $ - $ 103,691
Water rights 6,172,361 - - - 6,172,361
Construction in progress 2,609,940 644,982 - (2,535,693) 719,229
Total capital assets,
not being depreciated 8,885,992 644,982 - (2,535,693) 6,995,281
Capital assets being depreciated:
Water system 37,343,716 7,279,680 - 2,535,693 47,159,089
Equipment and vehicles 1,020,185 25,910 - - 1,046,095
Total capital assets being
depreciated 38,363,901 7,305,590 - 2,535,693 48,205,184
Less accumulated depreciation for:
Water system (6,887,350) (1,294,059) - - (8,181,409)
Equipment and vehicles (539,070) (196,989) - - (736,059)
Total accumulated depreciation (7.426,420) (1,491,048) - - (8,917,468)
Total capital assets,
being depreciated, net 30,937,481 5,814,542 - 2,535,693 39,287,716
Business-type activities
capital assets, net $ 39,823,473 $ 6,459,524 $, - $, - $ 46,282,997
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
General government $ 308,218
Public safety 424,971
Highways and streets 91,401
Culture and recreation 183,187
Total depreciation expense governmental activities $ 1,007,777
Business-type activities:
Water $ 1,491,048
Storm water drainage -
Total depreciation expense business-type activities $ 1,491,048
50
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
5. Construction Commitments
The Town has active construction projects as of June 30, 2003. The governmental fund
projects include road improvements and widening and Phase I of the reclaimed water project.
At year end the government's commitments with contractors are as follows:
Governmental
Remaining
Project Spent-to-date Commitment
Calle Concordia Road $ 20,996 $ 59,000
La Canada P oad extension 109,442 283,000
La Canada Road widening 231,780 7,493,640
Tangerine Road 3,262,156 3,223,102
Lambert Lane 18,196 307,519
Oracle Road improvement 212,831 54,968
Pusch View Road extension 353,873 50,000
First Avenue (Oracle to Tangerine) 453,976 143,832
$ 49663,250 $ 11,615,061
Business-type
Remaining
Project Spent-to-date Commitment
Phase I Reclaimed Water $ 719,229 $ 1Q,681.771
51
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
C. Interfund Receivables, Payables and Transfers
As of June 30, 2003 interfund receivable and payables were as follows:
Due From
General
Due To Fund
Public Transportation Fund $ 273,921
Nonmajor Governmental Funds 807,830
$ 1,081,751
Advances To
General
Advances From Fund
Water Fund $ 330329
The above interfund receivables and payables are monthly sales tax allocations owed by the
General Fund to the Public Transportation Fund, miscellaneous intergovernmental receivables
due to nonmajor funds and monies due to nonmajor funds for future debt service.
Interfund transfers for the year ended June 30, 2003 consisted of the following:
Transfers From
General
Transfers To Fund Nonmajor Total
General Fund $ - $ 193,194 $ 193,194
Public Transportation Fund 53,401 - 53,401
Nonmajor Governmental Funds 1,081,553 - 1,081,553
$ 1,134,954 $, 193,194 $ 1,328,148
52
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
Transfers were made from the General Fund to subsidize the Public Transportation Fund and to
transfer funds to the Municipal Debt Service Non-major Governmental Fund to make the
required principal and interest payments on outstanding bonded indebtedness. Unused bond
proceeds were transferred to the General Fund from the Library Construction Non-major
Governmental Fund to reduce outstanding bonded indebtedness.
D. Long-term Obligations
The Town has long-term bonds and loans payable issued to provide funds for the acquisition
and construction of major capital facilities. The Town has also issued debt to refund earlier
obligations with higher interest rates. The debt is being repaid by various debt service funds.
Compensated absences are paid by the applicable fund where each employee is regularly paid,
primarily the General Fund.
Changes in long-term obligations for the year ended June 30, 2003 are as follows:
Due Within
July 1,2002 Increases Decreases June 30,2003 One Year
Governmental Activities:
Bonds and loans payable:
Revenue bonds $ 6,941,076 $ - $ (346,960) $ 6,594,116 $ 361,290
Certificates of participation 4,340,000 - (170,000) 4,170,000 180,000
Loan payable - 1,716,000 - 1,716,000 -
Total bonds and loans payable 11,28 ,076 1.716.000 (516,960) 12,480.116 541.290
Other liabilities:
Compensated absences 538.293 169,524 - 707,817 380,717
Governmental activities long-term
liabilities $ 11,819,369 $ 1,885.524 $ (516,960) $ 13,187.933 $ 922.007
Business-type Activities:
Bonds and notes payable:
Revenue bonds $ 40,113,924 $ - $ (1,578,040) $ 38,535,884 $ 873,710
Notes payable 4,869,000 - (486,900) 4,382,100 486,900
44,982,924 - (2,064,940) 42,917,984 1,360,610
Less: deferred amount on discount (397,935) - 17,795 (380.140) (17,795)
Total bonds and notes payable 44,584.989 - (2,047,145) 42,537.844 1,342.815
Other liabilities:
Compensated absences 43,298 4,291 - 47,589 36,717
Business-type activities long-term
liabilities $ 44,628,287 $ 4,291 $ (2,047,145) $, 42,585,433 $ 1,379,532
•
53
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
Debt service requirements on long-term debt at June 30, 2003 are as follows:
Governmental Activities Business-type Activities
Year Ending
June 30 Principal Interest Principal Interest
2004 $ 541,290 $ 555,921 $ 1,360,610 $ 2,321,174
2005 1,512,290 526,678 1,370,610 2,252,390
2006 1,386,888 490,050 1,435,012 2,181,384
2007 625,620 457,358 1,451,280 2,107,193
2008 654,352 427,695 5,772,548 1,895,369
2009-13 2,991,328 1,665,511 7,796,272 7,515,632
2014-18 3,509,794 830,242 7,355,206 5,571,364
2019-23 1,258,554 100,886 7,826,446 3,475,964
2024-27 - - 8,550,000 1,33 7,031
$ 12,480,116 $ 5,054341 $ 42,917,984 $ 28,657,501
NOTE 4 - OTHER INFORMATION
A. Risk Management
The Town of Oro Valley, Arizona, is exposed to various risks of loss related to torts; theft of,
damage to and destruction of assets; errors and omissions; and natural disasters. The Town's
insurance protection is provided by the Arizona Municipal Risk Retention Pool, of which the
Town is a participating member. The limit for basic coverage is for $2,000,000 per occurrence
on a claims made basis. Excess coverage is for an additional $10,000,000 per occurrence on a
follow form, claims made basis. The aggregate limit is also $10,000,000. No significant
reduction in insurance coverage occurred during the year and no settlements exceeded insurance
coverage during any of the past three fiscal years.
The Arizona Municipal Risk Retention Pool is structured such that member premiums are
based on an actuarial review that will provide adequate reserves to allow the pool to meet its
expected financial obligations. The pool has the authority to assess its members additional
premiums should reserves and annual premiums be insufficient to meet the pool's obligations.
54
TOWN OF ORO VALLEY,ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED TUNE 30, 2003
The Town is insured by Arizona Municipal Workers Compensation Pool for potential worker
related accidents. The Town is self-insured for unemployment insurance. Changes in the
balances of claims liabilities during the past two years are as follows:
2003 2002
Unpaid claims, beginning of year $ - $ -
Incurred claims (including IBNRs) 20,283 16,563
Claim payments (20,283) (16.563)
Unpaid claims, end of year $ - $ -
B. Subsequent Events
Subsequent to June 30, 2003, the Town the discontinued contributing to the defined
contribution pension plan 401(a) and has elected to participate in the Arizona State Retirement
System. All employees currently contributing to the 401(a) plan will participate in the Arizona
State Retirement System.
C. Contingent Liabilities
Accumulated Sick Leave - Sick leave benefits provide for ordinary sick pay and are
cumulative but do not vest with employees unless an employee has exceeded 90 days of
accrued sick leave, then one-half of the sick leave balance in excess of 90 days is paid upon
termination. Unvested accumulated sick leave of Town employees at June 30, 2003, totaled
$293,731.
Lawsuits - The Town is a defendant in various lawsuits. In the opinion of the Town's attorney
the outcome of these lawsuits is not presently determinable.
D. Retirement Plans
Defined Contribution Pension Plan
All non-peace officers and certain part-time employees of the Town participate in a defined
contribution pension plan administered by the ICMA Retirement Corporation as a 401(a) plan.
The payroll for the Town employees covered by this plan the year ended June 30, 2003 was
$2,922,909. The Town's total payroll was $3,950,930.
55
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
A defined contribution pension plan provides benefits in return for services rendered, provides
an individual account for each participant, and specifies how contributions to the individual's
account are determined instead of specifying the amount of benefit the individual is to receive.
Under a defined contribution pension plan, the benefits a participant will receive depend solely
on the amount contributed to the participant's account, the returns earned on investment of
those contributions, and forfeitures of other participant's benefits that may be allocated to such
participant's account. All non-peace officer full-time Town employees must participate in the
pension plan within six months from the date they are hired. Contributions made by an
employee vest immediately and contributions made by the Town vest after one year of service.
An employee that leaves the employment of the Town is entitled to his or her contributions and
the vested portion of the Town's contributions, plus interest earned. Each employee must
contribute 5.0% of his or her gross earnings. The Town must contribute 7.0% of covered
earnings. During fiscal year 2002-03,the Town's required and actual contributions amounted to
$321,520. The employees' contributions totaled $321,520.
No pension provision changes occurred during the year that affected the required contributions
made by the Town or its employees.
The ICMA Retirement Corporation held no securities of the Town or other related parties
during the fiscal year 2002-03 or as of the close of the fiscal year.
As discussed in Note 4.B, the Town discontinued contributing to the 401(a) defined
contribution plan and will begin contributing to the Arizona State Retirement System on
September 1, 2003.
Public Safety Personnel Retirement System (PSPRS) and Arizona Corrections Officer
Retirement Plan (ACORP)
Plan Description - The Town contributes to the Public Safety Personnel Retirement System
(PSPRS), an agent multiple-employer, public employee retirement system. During fiscal year
ended June 30, 2003, the Town also began contributing to the Arizona Corrections Officer
Retirement Plan (ACORP). This plan is also an agent multiple-employer, public employee
retirement system administered by the Arizona Public Safety Retirement Personnel. These
plans act as common investments and administrative agents to provide retirement and death and
disability benefits for public safety and corrections personnel who are regularly assigned
hazardous duty in the employment of the State of Arizona or a political subdivision thereof. All
benefit provisions and other requirements are established by State statute. The PSPRS and
ACORP issue publicly available financial reports that include financial statements and required
supplementary information for PSPRS and ACORP. The reports may be obtained by writing to
Public Safety Personnel, 1020 E. Missouri Ave., Phoenix, AZ 85014 or by calling (602) 255-
5575.
56
TOWN OF ORO VALLEY, ARIZONA
NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2003
Funding Policy - Covered employees are required to contribute 7.65 and 8.50 percent of their
annual salary to the PSPRS and ACORP, respectively. The Town is required to contribute the
remaining amounts necessary to fund the PSPRS and ACORP, as determined by the actuarial
basis specified by statute. The current rate is 10.56 and 7.54 percent of annual covered payroll
for PSPRS and ACORP, respectively.
Annual Pension Cost - During the year ended June 30, 2002 (the date of the last available
information), the Town of Oro Valley's annual pension cost of $353,121 for the PSPRS for
police was equal to the Town of Oro Valley's required and actual contributions. No pension
cost was reported for the ACORP.
The required contribution was determined as part of the June 30, 2002 actuarial valuation using
an entry age actuarial funding method. Significant actuarial assumptions used in determining
the entry age actuarial accrued liability include (a) a rate of return on the investment of present
and future assets of 9.0% per year compounded annually, (b) projected salary increases of 6.5%
per year compounded annually, and (c) additional projected salary increases and inflation of
OM%to 3.0%per year attributable to seniority/merit.
The actuarial value of the Town of Oro Valley's assets was determined using techniques that
smooth the effects of short-term volatility in the market value of investments over a four-year
period. The Town of Oro Valley's unfunded actuarial accrued liability is being amortized as a
level percentage of projected payroll on a closed basis. The remaining amortization period at
June 30, 2002, was 20 years.
The preceding methods comply with the financial reporting standards established by the
Governmental Accounting Standards Board.
Three-Year Trend Information
PSPRS Police
Fiscal Year Annual Pension Percent Net Pension
Ended June 30, Cost(APC) Contributed Obligation
2000 $ 186,368 100.0 % $ -
2001 331,950 100.0 -
2002 353,121 100.0 -
Three-year trend information is not available for the ACORP.
Additional historical trend information for the Town's PSPRS and ACORP is disclosed on page
60. Historical trend information is presented in order for a reader to assess the progress made
in accumulating sufficient assets to pay pension benefits as they become payable.
57
4
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58
Required Supplementary Information
I
59
TOWN OF ORO VALLEY, ARIZONA
REQUIRED SUPPLEMENTARY INFORMATION
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM AND
ARIZONA CORRECTIONS OFFICER RETIREMENT PLAN
SCHEDULE OF FUNDING PROGRESS
Oro Valley PSPRS Police
Over(Under)
Entry Age funded AAL
Valuation Actuarial Actuarial Over(Under) Annual as a Percentage
Date Value of Accrued Percent funded Covered of Covered
June 30, Assets Liability(AAL) Funded AAL Payroll Payroll
1996 $ 1,591,318 $ 2,121,636 75.0 % $ (530,318) $1,440,638 (36.8)%
1997 2,239,319 2,614,221 85.7 % (374,902) 1,682,582 (22.3)%
1998 2,772,586 3,067,826 90.4 % (295,240) 1,890,076 (15.6)%
1999 3,623,182 3,956,207 91.6 % (333,025) 2,143,829 (15.5)%
2000 4,583,291 4,862,212 94.3 % (278,921) 2,493,062 (11.2)%
2001 5,766,661 5,168,557 111.6 % 598,104 2,948,683 20.3 %
2002 6,565,301 6,327,848 103.8 % 237,453 3,406,239 7.0 %
* Information prior to 1996 is not available.
Oro Valley ACORP Dispatchers
Over(Under)
Entry Age funded AAL
Valuation Actuarial Actuarial Over(Under) Annual as a Percentage
Date Value of Accrued Percent funded Covered of Covered
June 30, Assets Liability(AAL) Funded AAL Payroll Payroll
2002 $ - $ 433,070 - % $ (433,070) $ 395,386 (109.5)%
* Information prior to 2002 is not available.
60
Combining and Individual Fund
Statements and Schedules
61
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62
NONMAJOR GOVERNMENTAL NTAL FUNDS
SPECIAL REVENUE FUNDS
Industrial Development Authority- accounts for the industrial development activities of the Town.
Revegetation Assurances - accounts for monies received from developers to help ensure developments
are properly revegetated to Town standards.
State Seizures and Forfeitures - accounts for state police seizures and forfeitures received by the Town.
Federal Seizures and Forfeitures - accounts for federal police seizures and forfeitures received by the
Town.
DEBT SERVICE FUND
Municipal Debt Service - accounts for the payments of debt service on the 1996 Certificates of
Participation and the 1999 Municipal Property Corporation Excise Tax Revenue Bonds.
CAPITAL PROJECTS FUND
Library Construction- accounts for the collection and capital expenditures of the Oro Valley Library.
63
1
TOWN OF ORO VALLEY,ARIZONA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2003
Capital
Special Revenue Debt Service Projects
Industrial Federal Nonmajor
Development Revegetation State Seizures Seizures and Municipal Debt Library Governmental
Authority Assurances and Forfeitures Forfeitures Total Service Construction Funds
Assets
Cash and cash equivalents $ 193 $ 1,191,140 $ 63,674 $ 127,982 $ 1,382,989 $ 931,314 $ 27,591 $2,341,894
Receivables,net
Interest receivable - 2,206 2 - 2,208 332 409 2,949
Total assets $ 193 $ 1,193,346 $ 63,676 $. 127,982 $ 1,385,197 $ 931.646 $, 28,000 $2,344,843
Liabilities and Fund Balances
Liabilities
Accounts payable $ - $ - $ 313 $ 2,368 $ 2,681 $ - $ - $ 2,681
Intergovernmental payable - - 840 - 840 - - 840
Due to other funds - - 13,550 39,148 52,698 755,132 - 807,830
Customer deposits payable - 947,653 - - 947,653 - - 947,653
Total liabilities - 947.653 14,703 41,516 1,003,872 755,132 - 1,759,004
Fund balances
Unreserved 193 245,693 48,973 86,466 381,325 176,514 28,000 585,839
Total fund balances 193 245,693 48,973 86,466 381.325 176,514 28,000 585,839
Total liabilities and fund balances $, 193 $ 1.193,346 $ 63,676 $ 127,982 $ 1,385,197 $ 931.646 $ 28,000 $2,344,843
64
l
--------]
TOWN OF ORO VALLEY,ARIZONA
COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND
BALANCES-NONMAJOR GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30,2003
Capital
Special Revenue Debt Service Projects
Industrial Federal Nonmajor
Development Revegetation State Seizures Seizures and Municipal Debt Library Governmental
Authority Assurances and Forfeitures Forfeitures Total Service Construction Funds
Revenues
Fines and forfeitures $ - $ - $ 27,833 $ 54,530 $ 82,363 $ - $ - $ 82,363
investment earnings(loss) (3) (16.059) 1.075 3,417 (11.5 70) 6,260 (8,325) (13,635)
Total revenues (3) (16,059) 28.908 57,947 ._ 70.793 6.260 ___(8,_,325) 68.728
Expenditures
Current
General government 10 - - - 10 - 367,806 367,816
Public safety - - 30,176 41,800 71,976 - - 71,976
Debt Service
Principal retirement - - - - - 516,960 - 516,960
Interest on long-term debt - - - - - 564,798 - 564,798
Total expenditures 10 - 30.176 41,800. _ 1,081,758 367,806 1,521,550
Excess(deficiency)of revenues over
expenditures (13) (16,059) (1,268) 16,147 (1,193) (1.075,498) (376,131) (1.452,822)
Other financing sources(uses)
Transfers in - - - - - 1,081,553 - 1,081,553
Transfers out - - - - - - (193,194) (193,191)
Total other financing sources(uses) - - - - - 1,081,553 (193.194) 888,359
Net change in fund balances (13) (16,059) (1,268) 16,147 (1,193) 6,055 (569,325) (564,463)
Fund balances,beginning of year 206 261,752 50,241 70,319 382,518 170 459 597325 1.150.302
Fund balances,end of year $ 193 $= 245,693 $ 48,973 $ 86,466 $ 381,325 $ 176,514 $ 28,000 $ 585,839
65
TOWN OF ORO VALLEY,ARIZONA
TOWNWIDE ROADWAY DEVELOPMENT IMPACT FEES FUND
SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30,2003
Original and Final Variance with
Budget Actual Final Budget
Revenues
Intergovernmental $ 9,950,000 $ 1,520,898 $ (8,429,102)
Impact fees 1,004,000 885,371 (118,629)
Investment earnings(loss) 140,000 (92,796) (232,796)
Other - 55,625 55,625
Total Revenues 11,094,000 2,369,098 (8,724,902)
Expenditures
Current
Highways and streets 18,109,586 5,979,639 12,129,947
Total Expenditures 18,109,586 5,979,639 12.129,947
Excess(deficiency)of revenues over expenditures (7,015,586) (3,610,541) 3,405,045
Other financing sources(uses)
Proceeds from loan - 1,716,000 1,716,000
Total other financing sources(uses) - 1,716,000 1,716,000
Net change in fund balances (7,015,586) (1,894,541) 5,121,045
Fund balances,beginning of year 7,015,586 7,304,669 289,083
Fund balances,end of year $ - $ 5,410,128 $, 5,410,128
66
TOWN OF ORO VALLEY,ARIZONA
STATE SEIZURES AND FORFEITURES FUND
SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30,2003
Original and Final Variance with
Budget Actual Final Budget
Revenues
Fines and forfeitures $ 5,000 $ 27,833 $ 22,833
Investment earnings - 1,075 1.075
Total Revenues 5,000 28.908 23,908
Expenditures
Current
Public safety 49,338 30,176 19,162
Total Expenditures 49,338 30,l 76 19,162
Excess(deficiency)of revenues over expenditures (44,338) (1,268) 43,070
Fund balances,beginning of year 44,338 50,241 5.903
Fund balances,end of year $ - $ 48,973 $ 48,973
67
TOWN OF ORO VALLEY,ARIZONA
FEDERAL SEIZURES AND FORFEITURES FUND
SCHEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30,2003
Original and Final Variance with
Budget Actual Final Budget
Revenues
Fines and forfeitures $ 65,000 $ 54,530 $ (10,470)
Investment earnings - 3,417 3,417
Total Revenues 65,000 57,947 (7,053)
Expenditures
Current
Public safety 112,548 41,800 70,748
Total Expenditures 112,548 41,800 70,748
Excess(deficiency)of revenues over expenditures (47,548) 16,147 63,695
Fund balances,beginning of year 47,548 70,319 22,771
Fund balances,end of year $ - $ 86,466 $ 86,466
68
TOWN OF ORO VALLEY,ARIZONA
MUNICIPAL DEBT SERVICE FUND
S CI-IEDULE OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30,2003 •
Original and Final Variance with
Budget Actual Final Budget
Revenues
Investment earnings $ 4,000 $ 6,260 $ 2.260
Total Revenues 4.000 6,260 2,260
Expenditures
Debt Service
Principal retirement 516,960 516,960 -
Interest on long-term debt 568,593 564,798 3,795
Total Expenditures 1,085,553 1.081,758 3,795
Excess(deficiency)of revenues over expenditures (1,081,553) (1,075,498) 6,055
Other financing sources(uses)
Transfers in 1,081,553 1,081,553 -
Total other financing sources(uses) 1.081,553 1,081,553
Net change in fund balances - 6,055 6,055
Fund balances,beginning of year - 170,459 170,459
Fund balances,end of year $, - $ 176.514 $ 176,514
69
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70
STATISTICAL SECTION
in
00
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4
TOWN OF ORO VALLEY,ARIZONA
GENERAL GOVERNMENT EXPENDITURES BY FUNCTION
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal Highways Culture Claims I
Year General Public and and Capital and Debt
Ended Government Safety Streets Recreation Outlay Judgements Service Total
1994 $1,646,245 $2,316,936 $ 678,180 $ - $ 823,750 $ - $ 345,910 $5,811,021
1995 3,142,403 3,125,016 874,783 126,861 894,039 - 306,585 8,469,687
1996 2,778,347 3,670,514 1,216,141 407,484 167,662 - 398,348 8,638,496
1997 2,613,830 4,240,676 1,224,977 500,850 4,951,011 - 1,234,984 14,766,328
1998 2,880,570 4,251,231 1,207,437 647,146 837,944 - 740,170 10,564,498
1999 3,317,668 5,240,616 1,149,073 636,302 878,843 - . 793,212 12,015,714
2000 4,128,050 6,216,390 1,855,146 637,084 5,537,058 600,000 835,782 19,809,510
2001 7,256,772 7,347,742 2,924,119 1,193.846 3,628,630 - 2,537,759 24,888,868
2002 6,055,062 , 8,586,634 3,144,676 1,474,667 8,094,782 - 2,528,580 29,884,401
2003 6,698,052 8,796,643 8,892,030 2,394,212 - - 1,081,758 27,962,695
Source: Oro Valley Finance Department
35,000,000
30,000,000
25,000,000
. 20,000,000
15,000,000 1111
IM
10,000,000 '`
5,000,000
V
•, .
1 2 2 2 2
74
TOWN OF ORO VALLEY,ARIZONA
GENERAL GOVERNMENT REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(UNAUDITED)
Fiscal Fines Licenses Charges Contributions
Year Inter- and and for and Impact
Ended Taxes Governmenta Forfeitures Permits Services Donations Fees Interest Other Total
1994 $2,903,973 $1,852,882 $ 267,093 $1,338,826 $ 182,122 $ 125 $ 119,608 $ 265.466 $ 7,428 $6,937,523
1995 3,459,754 2,455,266 : 407,933 1,275,265 224,759 800 196,663 384,742 74,723 8,479.905
i
1996 3,792,632 3,230,509 1 263,386 990;713 200,525 7,681 399,511 450,712 90,276 ' 9,425,945 .
1997 3,865,996 5,380,979 280.644 941,888 198,948 28;052 804,907 498,158 48,036 12,047,608
T
1998 3,844,944 6,262,522 395,474 1,082,892 280,782 37,278 2,055,984 644,689 62,853 14,667,418
1999 4,518,732 6,780,403 331.032 1,411,820 239,945 2,001 1,594,956 884,085 50,902 15,813,876
2000 6,139,176 9,167,682 344,627 1,613.798 296,801 9,247 1,750,351 l 1,204,944 i 69,036 20,595.662
2001 6,429,157 8,328,908 333,755 1,776,265 387,657 3,785 1,413,932 1,342,814 172,726 20,188,999
2002 6,674,725 12,991,454 316,339 1,430,157 549,440 - 1,033,403 655,643 150,444 23,801,605
I
2003 1 6,217,798 11,786,746 307,570 1,784,568 1 633,406 37,331 885,371 1 (244,770) 178.376 21,586.396
s
Source: Oro Valley Finance Department
25,000,000
20,000,000
15,000,000
)14
. . ,10,000,000A ,4 i'llft ' isoi,r
5,000,000 # 3ti .4."4:.; vTI.,:;:,::
:-If".' -qk% i.f;"i '....'51:''
�.. .1 "$ ...,4'!.'
R �t
1',..!-it, .14,64-* *A
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75
TOWN OF ORO VALLEY, ARIZONA
STATE OF ARIZONA SALES TAX INFORMATION
TAXABLE ACTIVITIES, TAX RATES AND DISTRIBUTION SHARES
(UNAUDITED)
Tax Distribution
Business Activity Category Rate Share
Mining-Severance 2.500% 80.00%
Oil and Gas, Sand and Gravel 3.125% 32.00%
Transportaton- Persons and Freight 5.600% 20.00%
Utilities 5.600% 20.00%
Communication 5.600% 20.00%
Publishing 5.600% 20.00%
Job Printing 5.600% 20.00%
Private Cars/Pipelines 5.600% 20.00%
Prime Contracting 5.600% 20.00%
Owner Buildings 5.600% 20.00%
Restaurants and Bars 5.600% 40.00%
Amusements 5.600% 40.00%
Personal Property Rentals 5.600% 40.00%
Retail (excluding food sales) 5.600% 40.00%
Hotel/Motel 5.500% 50.00%
Membership Camping 5.600% 40.00%
Timbering- Severance (a) 80.00%
(a) The amount of severance tax levied on a severer engaged in the business of
timbering shall be:
(1) Two dollars thirteen cents per thousand board feet for timber products
that are derived from ponderosa pine.
(2) One dollar fifty-one cents per thousand board feet for timber products
derived from all species except ponderosa pine.
Source: Arizona Department of Revenue
76
TOWN OF ORO VALLEY, A.RIZONA
TRANSACTION PRIVILEGE (SALES) TAX RATES BY CATEGORY
(UNAUDITED)
Business Activity Category Rate
Publishing 2.0%
Printing and Advertising 2.0%
Contracting 2.0%
Retail Sales 2.0%
Restaurants and Bars 2.0%
Amusements 2.0%/o
Miscellaneous 2.0%"
Hotel/Lodging Room Rentals 5.0%
Source: Oro Valley Finance Department
77
TOWN OF ORO VALLEY,ARIZONA
HISTORICAL AND PROJECTED EXCISE TAX COLLECTIONS
($000's)
JUNE 30,2003
(UNAUDITED)
Actual(a) Projected
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
Year Year Year Year Year Year
Revenue Source 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05
Town Sales and Franchise Taxes $ 6,139 $ 6,395 $ 6,675 ' $ 6,293 $ 7,330 $ 7,623
Licences and Permits 1,597 1,750 1,415 1,759 1,821 1,894
Fines 203 225 203 225 200 208
State-Shared Sales Tax 1,727 1,845 2,289 2,323 2,495 2,595
State-Shared Income Tax 2,178 2,346 3,098 3,161 2,871 2,986
Total $11,844 $ 12,561 $ 13,680 $ 13,761 $ 14,717 $ 15,306
(a) All revenue sources are presented on a modified accrual basis of accounting except for Town sales taxes
which are presented on the cash basis of accounting per the Arizona Department of Revenue Standard
Industry Summary Local Taxes Collection Reports.
Source: Oro Valley Finance Department
Note: The above information is provided for bond requirements only and the bond does not require ten years of data.
$18,000
$16,000
$14,000
$12,000 -- .
$10,000 ---
$8,000 --$8,000 -
$6,000 -- ;
$4,000
$2,000
1999/00 2000/01 2001/02 2002/03 2003/04 2004/05
78
TOWN OF ORO VALLEY,ARIZONA
TOWN TRANSACTION PRIVILEGE(SALES)AND FRANCHISE TAX COLLECTIONS
BY INDUSTRY CLASSIFICATION
JUNE 30,2003
($000's)
(UNAUDITED)
fActual Projected
Fiscal Year Fiscal Year Fiscal Year 1 Fiscal Year Fiscal Year Fiscal Year
Industry Classification 1999/00 2000/01 2001/02 I 2002/03 2003/04 2004/05
I
Construction $ 3,023 $ 2,913 $ 2,779 $ 1,978 $ 2,100 $ 2,184
Manufacturing 3 2 6 1 4 2 2
Transportation,Communications&Utilities 28 32 55 101 125 130
Wholesale Trade 13 13 61 31 25 26
Retail Trade 1,497 1,763 1,877 2,086 2,580 2,683
Restaurants,Bars&Lodging 1,053 1,082 1,250 1,354 1,7651,836
Fire,insurance&Real Estate 25 73 45 62 25 I 26
Services 221 257 258 285 320 333
All Other 51 (3) 42 50 10 10
Cable Franchise 225 263 302 342 378 393
Total $ 6,139 $ 6,395 $ 6,675 $ 6,293 $ 7,330 $ 7,623
Source: Oro`'alley Finance Department
Note: The above information is provided for bond requirements only and the bond does not require ten years of data.
$9,000
$8,000
a`
$7,000 ,..� .. ....,
,,. ____ 4„,, .
t..
$6,000 *-: `
$5,000
$4,000
$3,000
$2,000
$1,000
$- ( t 1 I I ]
1999/00 2000/01 2001/02 2002/03 2003/04 2004/05
79 I
TOWN OF ORO VALLEY, ARIZONA
SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS
LAST TEN FISCAL YEARS
(UNAUDITED)
Special Special
Fiscal Assessment Assessment
Year 4 Billing Collected
1994 120,000 119,608
1995 120,000 h 119,620
1996 145,550 145,386
1997 61,963 62,192
1998 31,424 54,651
1999 34,098 34,098
2000 3,138 3,138
2001 - -
2002 - -
2003 - -
Source: Oro Valley Finance Department
Includes only debt service funds.
80
TOWN OF ORO VALLEY
ESTIMATED DEBT SERVICE COVERAGE
REGARDING EXCISE TAX COLLECTIONS
(UNAUDITED)
r""I'' Municipal Property Corporation
1996 1999 1999 2000 2001 2001 1996
Municipal Excise Tax Excise Tax Excise Tax Excise Tax Excise Tax Certificates
Water Systems Revenue Bonds Revenue Bonds Revenue Bonds Revenue Bonds Revenue Bonds of
Acquisition Bonds Water Building Land Water Library : Participation Projected
Fiscal Year Projected Excise Tax
Ending Annual Annual Annual Annual Annual Annual Annual Combined Excise Tax Debt Service
(June 30) Total • Total Total Total Total Total Total Debt Service Collections Coverage
1999 $ 1,831,100 ,$ 416,844 $ 2.247,944 9,641,000 4.28x
2000 $ 1,816,750 $ 234,752 $ 110,606 • $ 410,281 $ 2,572,389 11,844,000 ` 4.60x
2001 $ 1,826,876 $ 263,808 $ 205,935 $ 408.322 $ 2,704,941 12,561,000 4.64x
2002 $ 1,935,562 $ 269,130 : $ 210,733 $ 271,669 $ 545,680 $ 324,901 5 405.938 $ 3.963,613 13,680,000 3.45x
2003 $ 1,938,312 $ 269,285 $ 210,070 I $ 205,185 $ 423,753 -5 252,305 $ 407,994 $ 3,706,904 13,686,000. 3.69x
1,b1Millitt, I Or 1 11 ,11 1 1+o fil IJI Hier'i rang=:S t a i�''1[1flIIflI1II1IIfl_ p l I'l1:PJ1llh ii1I1.1J iflllhI1I.gilt1III1i]illi i
2004 • $ 1,939,162 $ 263,685 $ 203,845 $ 206.430 $ 432,661 $ 257,609 $ 409,350 $ 3,712,742 14,717,000 3.96x
2005 . 5 1,938,312 $ 263,285 $ 217,445 $ 207,405 $ 425,277 $ 253,212 $ 410,005 $ 3,714,941 15,306,000 4.12x
2006 $ 1,935,712 $ 271,985 $ 210,290 $ 212,985 $ 426,810 $ 254,125 $ 414,881 $ 3,726,788 4.12x
2007 • $ 1,956,312 • $ 275,575 $ 207,835 $ 208,285 $ 424,751 $ 252,899 ' $ 413,959 $ 3,739,616
2008 : 5 1,947,512 $ 272,875 . S 209,895 $ 203,535 $ 422,228 $ 251,397 $ 417.220 S 3,724,662
2 :
2009 $ 1,937,412 5 270,330 $ 211,425 $ 198,735 $ 422,269 $ 251,421 $ 414.25 $ 3,705,818
2010 $ 1,951,012 $ 272,140 $ 107,363 $ 203,640 $ 427,701 $ 254,655 $ 414,994 $ 3,631,505
2011 . $ 1,937,012 $ 273,020 $ 203,128 $ 416,826 $ 248,180 $ 414,900 $ 3,493,066
2012 ` $ 1,944,776 $ 268,540 • $ 202,190 $ 421,151 $ 250,755 $ 413,944 $ 3,501,356
2013 $ 1,949,812 5 166.340 $ 205,690 - $ 418,487 $ 249,169 $ 412,125 $ 3,401,623
2014 $ 1,952,126 $ 225,375 $ 203,800 $ 421.212 $ 250,792 $ 414.300 $ 3,467,604
2015 • $ 1,951,712 $ 221.875 . $ 206,520 $ 419,408 $ 249,717 $ 415,325 $ 3,464,557
2016 $ 1,947,600 $ 227,875 5 203,625 , $ 416,430 $ 247,945 $ 415,200 $ 3,458.675
i 2017 $ 1,940,712 $ 223,375 $ 205,100 $ 415,882 $ 247,618 $ 413,925 $ 3,446,612
2018 $ 1,931,050 $ 223,500 $ 206,025 $ 417,606 $ 248,645 $ 411,500 $ 3,438,325
2019 , $ 1.918,050 $ 223,125 $ 206,400 $ 415,333 $ 247,292 $ 3,010,200
2020 $ 1,952,250 $ 206,225 $ 415,333 $ 247,292 $ 2,821,100
2021 $ 1.958,718 $ 205,500 $ 414,393 $ 246,732 $ 2,825,343 '
2022 $ 1,961,156 $ 1,961,156
2023 $ 1,959,562 $ 1,959,562
2024 $ 1,953,938 $ 1,953,938 .
2025 $ 1,969,282 $ 1,969,282
2026 $ 4,004,250 $ 4,004,250
. .
•
81
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF BONDED INDEBTEDNESS
JUNE 30, 2003
(UNAUDITED)
Total General Obligation Bonded Debt None
Primary Assessed Valuation $ 310,234,311
Secondary Assessed Valuation 326,699,884
Estimated Full Cash Value 2,811,190,086
Source: 2003 State of Arizona Department of Revenue Abstract of the Assessment Roll
Direct General Obligation Bonded Debt Outstanding None
Water and Sewer Revenue Bonds Outstanding None
Street and Highway User Revenue Bonds Outstanding None
Issue Maturity Balance
Series Purpose Dates Outstanding
Municipal Property Corporation Bonds 1996 Water Company 07/01/26 $ 26,079,918
Certificates of Participation 1996 Land Acquisition 07/01/17 4,170,000
Municipal Prop. Corp.-Excise Tax Rev. Bonds 1999 Dev. Serv.Bldg. 07/01/09 1,180,000
Municipal Prop. Corp.-Excise Tax Rev.Bonds 1999 Water Improvements 07/01/19 2,782,613
Water Development Fee Revenue Obligations 2000 Water Improvements 01/01/08 4,225,000
Excise Tax Revenue Obligations 2000 Land Acquisition 07/01/20 2,380,000
Municipal Prop. Corp.-Excise Tax Rev.Bonds 2001 Water Improvements 07/01/20 5,068,214
Municipal Prop. Corp.-Excise Tax Rev. Bonds 2001 Library 07/01/20 3,034,116
82
TOWN OF ORO VALLEY, ARIZONA
DIRECT AND OVERLAPPING GENERAL OBLIGATION BONDED DEBT
JUNE 30, 2003
(UNAUDITED)
General
Obligation Approx. Net Debt
Overlapping Jurisdiction Bonded Debt Percent Amount
State of Arizona None 0.80 % None
Pima County $ 153,280,000 6.24 $ 9,564,672
Pima County Community
College District 81,470,000 6.24 5,083,728
Pima County Flood Control
District 6,595,000 7.78 513,091
Amphitheater Unified School
District No. 10 131,795,000 33.92 44,704,864
Town of Oro Valley None 100.00 None
Total direct and overlapping general
obligation bonded debt $ 59,866,355
Direct and Overlapping General Obligation Debt Ratios
As% of As % of
Per Capita Town's Town's
Bonded Debt Secondary Estimated
Population Est. Assesssed Full Cash
A 37,260 Valuation Value
Direct General Obligation
Bonded Debt $ - 0.00% 0.00%
Direct and Overlapping 1,606.72 20.32% 2.36%
General Obligation Bonded Debt
83
TOWN OF ORO VALLEY,ARIZONA
COMPUTATION OF LEGAL DEBT MARGIN
JUNE 30,2003
(UNAUDITED)
Net secondary assessed valuation $ 326,699,884
Calculation of 20%Debt Limitation
20%of secondary net
assessed valuation $ 65,339,977
Bonds outstanding -
Net 20%Debt Limitation 65,339,977
Calculation of 6°i°Debt Limitation
6%of secondary net
assessed valuation 19,601,993
Bonds outstanding -
Net 6%Debt Limitation 19,601,993
Total Bonding Capacity $ 84,941,970
(1) Under Arizona law, cities can issue additional general obligation bonds for
supplying specific services, such as water, sewer, lighting, parks and recreational
facilities up to an amount not exceeding 20%of assessed valuation.
(2) Under Arizona law, cities can issue general obligation bonds for general municipal
purposes up to an amount not exceeding 6%of assessed valuation.
Source: Oro Valley Finance Department
84
TOWN OF ORO VALLEY, ARIZONA
PROPERTY TAX ASSESSMENT RATIOS AND
COMPARATIVE SECONDARY ASSESSED VALUATION HISTORIES
TAX YEARS 1994 THROUGH 2003
(UNAUDITED)
Property Classification I 1994 I 1995 [ 1996 1 1997 1998 11999 2000 2001 12002 12003
Mining 30% 29%1 28% 27% 26% 25% 25% 25% 25%1 25%
Utility 30% 29% 28% 27% 26% 25% 25% 25% 25%1 25%
Commerical and Industrial 25% 25% 25%. 25% 25% 25%. 25% 25% 25% 25%
Agriculture and Vacant Land 16% 16% 16% 16% 16% 16% 16% 16% 16% 16%
Owner Occupied Residential 10% 10% 10% 10% 10% 10% 10% 10% 10% 10%
Leased or Rented Residential 11°./s 10% 10%. 10% 10% 10% 10% 10% 10% 10%
Railroad,Private Car Company 25% 26% 24% 23% 22% 21% 10% 10% 10% 10%
Airline Flight Property I
r
Source: Arizona Department of Revenue
85
TOWN OF ORO VALLEY,ARIZONA
COMPARATIVE SECONDARY ASSESSED VALUATION HISTORIES
TAX YEARS 1995 THROUGH 2003
(UNAUDITED)
Pima State of
Tax Year County Arizona
2003 $ 5,233,293,681 $ 40,861,415,479
2002 4,837,084,048 36,825,660,973
2001 4,491,395,307 34,468,574,240
2000 4,196,858,967 32,071,738,214
1999 4,616,303,822 28,184,077,278
1998 4,915,883,987 26,793,103,101
1997 3,247,512,122 25,3 84,679,197
1996 3,218,883,605 23,022,330,962
1995 3,150,104,570 22,179,317,949
Source: Arizona Department of Revenue
Note: The above information is provided for bond requirements only and the bond does not require ten years of data.
86
TOWN OF ORO VALLEY, ARIZONA
ASSESSED VALUATIONS AND TAX RATES
JUNE 30, 2003
(UNAUDITED)
Arizona legislation limits increases in assessed valuation of residential properties, limits total property
taxes, levied by counties, cities, towns, community college districts, fire districts and school districts,
establishes maximum limits on annual expenditures by counties, cities towns, community college
districts, fire districts and school districts subject to adjustments for population and cost of living
changes. There is no provision which would limit the amount of taxes which may be levied or
expended to pay debt service on existing or future bond issues.
Direct and Overlapping Secondary Assessed Valuation and Tax Rates per$100 of Assessed
Valuation (1)
2003
Secondary Primary Tax Rates
Assessed Assessed Per$100 of
Overlapping Municipality Valuation Valuation Assessed Valuation
State of Arizona $ 40,861,415,479 $ 38,311,495,654 0.0000
Pima County 5,233,293,681 5,030,943,008 5.3587
Pima Cty. Comm. College Dist. 5,233,293,681 5,030,943,008 1.4884
Pima County Library District 5,233,293,681 N/A 0.2124
Pima Cty. Flood Control Dist. 4,196,842,133 N/A 0.3546
Pima Cty. Fire Dist. 5,233,293,681 N/A 0.0441
Central AZ. Water Conservation
District 5,233,293,681 N/A 0.1200
Golder Ranch Fire District 156,315,036 N/A 1.9600
Amphitheater Unified School
District 963,024,651 847,472,378 6.7601
Total Tax Rates Per$100 of Assessed
Valuation:
Total Tax Rates Inside Town of Oro Valley,
Golder Ranch Fire District and
Amphitheater Unified School District
District No. 10 16.2983
Total Tax Rates Inside Town of Oro Valley,
and Amphitheater Unified School District
No. 10 and Outside Golder Ranch Fire
District 14.3383
(1) Based upon 2003 data obtained from the tax rolls of the Arizona Department of Revenue.
87
TOWN OF ORO VALLEY,ARIZONA
PRIMARY AND SECONDARY PROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTS
(PER$100 OF ASSESSED VALUE)
LAST TEN FISCAL YEARS
(UNAUDITED)
Pima
County Amphi.
Flood Pima County Central Unified
Fiscal State of Pima Control Comm. Free Arizona Fire School Town of
Year Arizona County District College Library Project District Distirct Oro Valley Total
1994 0.4700 5.0603 0.4623 1.1038 0.2024 0.1400 0.0501 7.3911 0.0000 14.8800
1995 0.47001 5.0638 0.3596 1.2183 0.2124 0.1400 0.0539 8.1646 0.0000 15.6826
1996 0.0000 5.0138 0.3596 1.2433 0.2224 0.1400 0.0549 7.6789 0.0000 14.7129
1997 0.0000 5.1139 0.3296 1.1836 0.2224 0.1400 0.0517 7.5099 0.0000 14.5511
1998 0.0000 5.1802 0.3246 1.1922 0.2224 0.1400 0.0515 7.0881 0.0000 14.1990
.
1999 , 0.0000 5.5287 0.3046 1.3696 0.2024 0.1400 0.0511 7.1715 0.0000 14.7679
2000 10.0000 5.5193 0.3046 1.5574 0.2024 0.1300 0.0495 6.8816 0.0000 14.6448
2001 0.0000 5.4644 0.3546 1.5470 0.2124 0.1300 0.0488 7.4427 0.0000 15.1999
2002 0.0000 5.3759 0.3546 1.5333 0.2124 0.1300 0.0458 7.0247 0.0000 14.6767
2003 0.0000 5.3587 0.3546 1.4884 0.2124 0.1200 0.0441 6.7601 0.0000 14.3383
Source: Arizona Tax Research Association
Note: The primary and secondary property tax rates for Pima County,Community College and the
Amphitheater Unified School District jurisdictions are added together in the table.
2003 Property Tax Rates
Town of Oro State of Arizona
Valley 0.0000 Pima
Amphi. Unified 0.0000 County
School Distirct 5.3759
7.0247
111111116' s
r. Pima County
Fire District
0.0458 Flood Control
Distric
Pima Comm. 0.3546
Central Arizona College
Project County Free 1.5333
0.1300 Library
0.2124
88
TOWN OF ORO VALLEY,ARIZONA
NET ASSESSED AND FULL CASH VALUES OF TAXABLE PROPERTY
LAST TEN TAX YEARS
(UNAUDITED)
Secondary Total
Tax Assessed Full Value to Full
Year Type Value Cash Value Cash Value
1994 Secondary $ 84,327,297 $ 700,276,726 12.04%
1995 Secondary 119,234.229 1,012,388,701 11.78%
1996 Secondary 130,338,325 1,134,829,789 11.49%
1997 Secondary 165,265,200 1,443,744,912 11.45°i°
1998 Secondary 178,766,882 1,547,098,212 11.55%
1999 Secondary 196,647,641 1,660,678,769 11.84%
2000 Secondary 220,687,234 1,874.760,891 11.77%
2001 Secondary 257,234,738 2,152,330,708 11.95%
2002 Secondary 294,649,424 2,536,114,768 11.62%
2003 Secondary 326,6.99,884 2,811,190,086 11.62%
•
Source: Pima County Assessor
$350,000,000
$300,000,000
$250,000,000
$200,000,000 -— --
$150,000,000
$100,000,000
$50,000,000
093 °�� °�� c5 °�� 0c5 O�� Ods V� VOA
89
TOWN OF ORO VALLEY, ARIZONA
SECONDARY ASSESSED VALUATION BY PROPERTY CLASSIFICATION
LAST FIVE TAX YEARS
(UNAUDITED)
1999 2000 2001 2002 2003
Secondary Secondary Secondary Secondary Secondary
Assessed Assessed Assessed Assessed Assessed
Property Class Valuation Valuation Valuation Valuation Valuation
Utilities $ 3,805,840 $ 4,356,308 $ 4,224,746 $ 5,432,662 $ 5,478,784
Commercial and Industrial 22,862,660 27,360,621 38,352,223 45,660,391 53,091,845
Agricultural and Vacant 22,076,492 26,182,766 30,114,158 35,879,382 36,099,358
Residential(owner occupied) 139,909,745 154,208,262 171,628,461 193,762,244 217,987,550
Residential(rental) 7,992,904 8,579,277 12,915,150 13,914,745 14,042,347
Commercial Historical Property - - - - -
$ 196,647,641 $ 220,687,234 $ 257,234,738 J $ 294,649,424 $ 326,699,884
Source: Arizona Department of Revenue,Abstract of the Assessment Role and the Assessor of the County.
Note: The above information is provided for bond requirements only and the bond does not require ten years of data.
90
TOWN OF ORO VALLEY,ARIZONA
SECONDARY ASSESSED VALUATION OF MAJOR TAXPAYERS
JUNE 30,2003
(UNAUDITED)
•
2003 As%of Town's
Secondary Total Secondary
Assessed Assessed
Taxpayer Valuation Valuation
CHH Tucson Partnership(El Conquistador Hotel) $ 14,60,625 ' 4.43%
Ventana Medical Systems Inc. 2.821,320 0.86%
Barclay Group 2,309, 28 0.71%
Evans Withycombe Finance Partnership 2,110,400 0.65%
Tucson Electric Power 1,840,068 0.56%
Home Depot 1,640,106 0.50%
Qwest 1,605,809 0.49%
'Lincoln National Life Insurance Co. 1,501,790 0.46%
Rancho Vistoso Center LLC 1,421,425 0.44%
Boulder Canyon 1,142,234 0.35%
Totals $ 30.853,505 10.47%
Source: Pima County Assessor's Office
91
TOWN OF ORO VALLEY,ARIZONA
HISTORICAL AND PROJECTED WATER SYSTEM REVENUES,
EXPENSES,DEBT SERVICE AND COVERAGE
(UNAUDITED)
Historical Actual
1999/00 2000/01 2001/02 2002/03
Revenues:
Water revenues $ 6,454,446 $ 6,719,666 $ 8,176,260 $8,599,299
Water connection fees 738,737 1,399,574 1,185,386 1,082,727
Alternative water connection fees 600,726 275,526 194,099 188,250
Other revenues 346,669 495,386 536,881 510,444
Interest income 565,936 924,112 498,535 (50,977)
Total revenues 8,706,514 9,814,264 10,591,161 10,329,743
Expenditures:
Personnel 910,396 1,125,462 1,334,751 1,519,058
Operations&maintenance 2,088,756 1,929,066 2,443,757 3,057,416
CAP water costs 220,112 211,142 236,142 500,681
Total expenditures 3,219,264 3,265,670 4,014,650 5,077,155
Net water system revenues 5,487,250 6,548,594 6,576,511 5,252,588
Water supported debt service:
1996 Bonds debt service 1,816,750 1,826,875 1,935,563 1,938,313
1999 Water related debt service 234,752 263,808 269,130 269,285
2000 Water commection fees debt servi« - 4 1,109,053 1,309,590 1,076,673
2001 Water related debt service - 426,225 426,950 436,226
Total water supported debt service $ 2,051,502 $3,625,961 $ 3,941,232 $3,720,497
Net water system revenues
debt service coverage 2.67 x 1.81 x 1.67 x 1.41 x
Source: Oro Valley Finance Department
Note: The above information is provided for bond requirements only and the bond does not require ten years
of data.
Historical financial statements re-stated to reflect Water Connection Fees Fund and Alternative Water
Connection Fees Fund.
92
TOWN OF ORO VALLEY,ARIZONA
ORO VALLEY WATER UTILITY
SCHEDULE OF RATES,FEES AND CHARGES
(UNAUDITED)
SCHEDULE OF WATER RATES
EFFECTIVE JULY 5,2002
METER
SIZE
BASE RATE COMMODITY COMMODITY COMMODITY
includes TIER 1 TIER 2 TIER 3
ZERO gallons $1.90 per 1000 gallons $2.35 per 1000 gallons $3.00 per 1000 gallons
i
5/8 x 3/4 $12.00 0-10,000 10,001-25,000 over 25,000
3/4 x 3/4 $18.00 0-10.000 10,001-25,000 over 25,000
I $30.01 0-16,000 16,001-27,000 over 27,000
1.5 $60.00 0-38,000 38,001-64,000 over 64,000
2 $96.00 0-80,000 4 80,001-134,000 over 134,000
3 $192.00 0-186,000 186,001-311,000 over 311,000
4 $300.00 0-169,000 169,001-283,000 over 283,000
6 $600.00 0-1,800,000 1,800,001-3,006,000 over 3,006,000
8 $1,200.00 0-1,800,000 1,800,001-3,006,000 over 3,006,000
Golf course usage to be billed at Tier 1 rates. Tier 2& Tier 3 will be implemented for any usage in
excess of ADWR allotment and will be billed after ADWR Annual report is filed.
The Town entered into an agreement at the time of acquisition of the Rancho Vistoso Water Company
that provides for a special rate for the Vistoso Partners golf courses. The commodity rate for any Vistoso
Partners golf course is$194.00 per acre foot of water effective October 4,2002. This rate is valid until
an alternative source of water can be provided to the golf courses.
The following rates or service charges are effective October 2,1999:
Service Charge Amount
New Service Establishment Fee $20.00
Service Reconnection Fee $25.00
Service Reconnection Fee(after 5pm) $50.00
Meter Re-read Fee $20.00
Insufficient Funds/Return Check Fee $25.00
Backflow Prevention Install.Permit $35.00
Customer Requested Meter Test Cost
Customer Security Deposit(basic) $40.00
Destruction of Property Cost
Hydrant Meter Deposit $1,250.00
Delinquent Payment Fee $5.00
Service Area Inclusion Fee $5.00 per acre or$2.00 pe
lot
93
TOWN OF ORO VALLEY,ARIZONA
ORO VALLEY WATER UTILITY
SCHEDULE OF RATES, FEES AND CHARGES
(UNAUDITED)
Meter Installation
Meter Size Charges AWRD Fees
(in inches) Effective 7/6/2002 Effective 8/13/1996
5/8"X 3/4" $150.00 $300.00
3/4"X 3/4" $175.00 $450.00
1"standard $200.00 $750.00
1.5"standard $390.00 $1,500.00
1.5"turbine $560.00 $1,500.00
2"standard $560.00 $2,400.00
2"turbine $550.00 $2,400.00
2"compound $1,365.00 $2,400.00
3"turbine $875.00 $4,500.00
3"compound $1,700.00 $4,500.00
4"turbine $1,600.00 $7,500.00
4"compound $2,750.00 $7,500.00
6"turbine $3,240.00 $15,000.00
6"compound $4,925.00 $15,000.00
8"turbine Time&Materials N/A
Multifamily
Per Unit Cost N/A $144.00
Turf Uses(per acre)
Golf course turf areas $3,680.00
Lakes&opern water $4,640.00
Turf for cemeteries, $2,880.00
parks&schools
Turf areas with 10 $2,880.00
acres or more turf
Note: 5.6% sales tax must be added to meter installation fees.
94
TOWN OF ORO VALLEY, ARIZONA
ORO VALLEY WATER UTILITY
SCHEDULE OF RATES, FEES AND CHARGES
JULY 5, 2000
(UNAUDITED)
Potable Water System
Development Impact Fee Schedule
Single-Family *Comerciall Irrigation(non-turf)
Meter Size Residential Industrial Fees Meter Fees
5/8" $1,774 $4,080 $3,193
1" $4,435 $10,200 $7,983
1 1/2" $8,870 $20,400 $15,965
2" $14,192 $32,640 $25,544
3" --- $65,280 $51,088
4" --- $102,000 $79,825
6" --- $204,000 $159,650
8" --- $408,000 $319,300
The meter component of the fee for master-metered residential uses is the higher of$834 per
unit or the single-family residential fee(s)for the master meter(s)* •
Individual metered residential units shall pay the single-family residential fee for each
meter.
Turf usage fee is$18,351 per acre of turf.
The total Potable Water System Development Fee for commercial/industrial and master-
metered residential uses is the sum of the meter component set forth above and the
following supplemental fee based on fire flow for uses requiring more than 1,000 gpm of
fire flow (based on the total area of development and the fire flow requirement as
determined by the Fire Department):
Fire-Flow Requirement I SDIFs
1,001 - 1,500 gpm $3,230/meter
1,501 -2,000 gpm $14,847/meter
2,001 -2,500 gpm $26,151/meter
For residential uses, this fee shall be paid when construction permits are issued. For all
other uses, this fee shall be paid when a water meter is obtained. If water system
enhancements are required in order to have sufficient capacity to provide water to a
development which will be served pursuant to a line extension agreement,the line extension
agreement mayprovide either that the developerpaythe full feeprovided bythis section at
�' P
the time of entering into the line extension agreement or that the developer construct all
system enhancements needed to serve the development which is the subject of the line
extension agreement.
95
TOWN OF ORO VALLEY, ARIZONA
NUMBER OF METERS CONNECTED
(UNAUDITED)
Fiscal Meters Running
Year Connected Total
Pre-05/01/96 * 9,863 9,863
1995/96 ** 152 10,015
1996/97 523 10,538
1997/98 802 11,340
1998/99 985 12,325
1999/00 *** 1,930 14,255
2000/01 789 15,044
2001/02 507 15,551
2002/03 470 16,021
2003/04 450 16,471
2004/05 450 16,921
2005/06 450 17,371
2006/07 450 17,821
2007/08 450 18,271
* Connections existing at the time the Town acquired the two private
water companies.
** Connections added between May 1st and June 30, 1996.
***
The Oro Valley water utility assumed management of the former OV
#1 customers (977) in July 1999.
Source: Oro Valley Water Utility
20,000
18,000
16,000
14,000 .
12,000 r-. . . .
10,000
8,000 _._.... .___. ..�.. ___ .....6,000 - - _
4,000 -
2,000 _,
t 1 1 r r r t i .1 1 1 1
4). P.c3 N4=5 c,4 et° ,i5) ei5) (19 (P (19 (1°
o
96
TOWN OF ORO VALLEY, ARIZONA
NUMBER.OF CONNECTIONS BY TYPE
FISCAL YEAR 2002/03
(UNAUDITED)
Number Percentage Percentage
of of Water of
User Type Connections Total Revenues Total
Residential 15,204 94.90% $ 6,004,443 69.82%
Commercial 203 1.27% 500,836 5.82%
Irrigation 331 2.07% 686,857 7.99%
Construction 273 1.70% 199,075 2.32%
Turf 9 0.06% 1,156,792 13,45%
Wholesale/Unmetered 1 0.01% 51,296 0.60%
Totals 16,021 100.0% $ 8,599.299 100.0%
Source: Oro Valley Water Utility and Finance Department
Wholesale/Un-
Construction Turf metered
2.32% 13.45% 0.60%
(\ J
Irrigation \
-\
4.1111■- _`" l'ilFV*
w„,,,,4
Commercial ,�, �i;, `' . ,A,
5.82% t �+�t ��°.,.
k ' ������� r. Residential
69.82%
97
TOWN OF ORO VALLEY,ARIZONA
HISTORY OF CONNECTIONS TO THE WATER SYSTEM
LAST FIVE FISCAL YEARS
(UNAUDITED)
Fiscal
Years Single Multi-
Ending Family Family Commercial Irrigation Turf Total Total
June 30 Connections Connections Connections Connections Connections Connections EDU's(a)
1999 928 18 10 28 1 985 1,277
2000 927 24 33 21 1 1,006 (b) 1,397
2001 749 9 14 15 0 787 789
2002 477 1 11 18 0 507 666
2003 416 29 10 15 0 470 610
(a) EDU's are determined by dividing the total amount collected with respect to connections to the system by the then
existing fee for a 5/8-inch connection. There can be no assurance that this level of connections or any other level
will continue in future years.
(b) On 7/1/99 the Town assumed managment of the OVWID #1 which consisted of 977 customers. These customers
are not considered "new" connections and were not subject to impact fees, they have not been included in this
figure.
Source: The Town.
Note: The above information is provided for bond requirements only and the bond does not require ten years of data.
Total EDU's
1,3'
1,400 -: ``
d �- r�
1,200 2'; 1! 4„.. f•
1,000 . : • :.. �. „ •.
••S. t t >.' "�t(€`. ..tea.,• •
800 • .. ,,•• _ , . —p,
4.0.40
6001111..-.:: . , r. .,-.
.. ..., ~~ rte• •
400 �^
200 r='. .,-.
1999 2000 2001 2002 2003
98
TOWN OF ORO VALLEY,ARIZONA
HISTORY OF BUILDING PERMITS
LAST FIVE FISCAL YEARS .
CONAUDI'l'ED)
1 Fiscal Year Ending June 30,
Building Permits j 1999 2000 2001 2002 1 2003
Single Family Residential 1,020 1,144 793 534 412
Office 9 14 4 16 10
Miscellaneous 23 102 290 180 157
Retail 7 11 6 11 8
Apartments 6 10 - - .111
Total Commercial 45 137 300 207
Total 1,065 1,281 1,093 741 587
Source: The Town.
Note: The above information is provided for bond requirements only and the bond does not require ten years of data.
Single Family Residential
1,144
1,200 lJ�-, .iii f'
,Ill1M1
1,000 i t.l. 1i' 1 'M'
4 793 — —800 -- H11, ; 1 : Iiii.
— --i.A
!
:Ili! I 11.1h1
11 i 'i53fti;600 ; 1; ! Iiia;}1!j;1 1011,. Ali1j
412 iv,:
; 1111 1400 111 ! 1 111111; !i1►1 I !t >!
200 • 1 di l: I11111iiiii -- r l+I 11111! ; i,,
i' I !' ' ''- 11111')I
1999 2000 2001 2002 2003
99
TOWN OF ORO VALLEY,ARIZONA
SCHEDULE OF THE 15 LARGEST WATER SYSTEM CUSTOMERS
FISCAL YEAR 2002/03
(UNAUDITED)
Annual Annual
Gallons Water
Water System Customer Delivered* Charges
Hilton El Conquistador Golf Course&Country Club 347,963 $ 686,188
Sun City Golf Course 137,378 268,219
Hilton El Conquistador Resort 39,327 101,550
Vistoso Highland Golf Course 145,934 79,427
Sun City Community Association 16,456 60,660
Stone Canyon Golf Course 200,217 105,369
Rockridge Apartments 23,365 65,332
Copper Creek Elementary School 4,332 16,612
La Reserve Apartments 22,177 60,431
La Cholla Air Park 22,191 50,740
The Boulder Apartments 11,987 29,622
Fry's Grocery Store 9,164 26,598
Honeywell(Allied Signal) 6,780 20,101
Pusch Ridge Christian Academy 9,278 28,013
Marana Public School(DeGrazia) 3,851 12,673
Totals 1,000,400 $ 1,611,535
* 000's omitted.
Source: Town
100
TOWN OF ORO VALLEY, ARIZONA
DEMOGRAPHIC STATISTICS
JUNE 30, 2003
(UNAUDITED)
opulation by Age Group
Percentage
Age Group Number of Total
Under 5 1,871 5.02%
5 - 14 4,758 12.77%
15 - 19 2,008 5.39%
20 - 29 2,407 6.46%
30 - 39 4,348 11.67%
40 - 49 5,835 15.66%
50 - 64 7,575 20.33%
65 and over 8,458 22.71%
Total 37,260 100.00%
Sources: Town of Oro Valley Planning and Zoning Division
Under 5
65 and over 5.02% 5- 14
22.71% 12.77%
5.39%
fr 20 -29
6.46%
50-64
20.33% 30-39
a
11.67/0
40 -49
15.66%
101
TOWN OF ORO VALLEY, ARIZONA
DEMOGRAPHIC STATISTICS
JUNE 30, 2003
(UNAUDITED)
Population by Ethnic Background
Percentage
Category Number of Total
White 32,845 88.15%
Hispanic 2,783 7.47%
Black/African American 380 1.02%
Native American 112 0.30%
Other 1,140 3.06%
Total 37,260 100.00%
Sources: Town of Oro Valley Planning and Zoning Division
Black/African Native
American American
1.02% 0.30% Other
Hispanic 0
7.47%
0
,S i F�+'Y "n m .. 117444 x➢ •J'ffi ';;:,
.a
♦t t;r kis` a4 .' r xgif'"` '+ � �715,A
White
88.15%
102
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TOWN OF ORO VALLEY,ARIZONA
SCHEDULE OF TOP EMPLOYERS
JUNE 30,2003
(UNAUDI'I ED)
Governmental
The Town of Oro Valley was incorporated in April, 1974. The Town is governed by a mayor, four council
members, and a town manager. There is a local police department and service from Golder Ranch Fire
District and Rural-Metro Fire Department,a private company available through subscription.
Number of
Largest Employers Product/Service Employees
Hilton El Conquistador Resort Dining/Recreation/Hotel 395
Ventana Medical Systems Medical Research 379
Town of Oro Valley Government 337
Fry's Food Stores(2) Grocery Store 283
Hilton El Conquistador Country Club Dining/Recreation 230
Canyon Del Oro High School School 171
Target Retail Store 150
Long Realty Real Estate 125
Home Depot Retail Store 124
Stone Canyon Golf/Golf Club at Vistoso Dining/Recreation 117
Securaplane Aerospace 110
Safeway Grocery Store 99
Oro Valley Country Club Dining/Recreation 90
Aventis Pharmaceuticals Medical Research 70
Desert Point Assisted Living 65
Uno's Chicago Bar&Grill Restaurant/Bar 60
Basha's Food Store Grocery Store 57
Risky Business Restaurant/Bar 43
Pizza Hut Restaurant 42
Walgreen's(2) Drug Store 42
Alterra Claire Bridge Assisted Living 38
Ross Stores Retail Store 30
Rubio's Baja Grill Restaurant 30
PetsMart Retail Store 29
Pusch Ridge Day Care Day Care 27
General
The Town of Oro Valley encompasses an area of approximately 32.91 square miles. Located in northeastern
Pima County,the Town is six miles north of the Tuscon city limits. The Town's current population is 37,260
and recorded a 2.9%unemployment rate in 2003.
104